Online ad recovery will make life tricky for paid content publishers

Posted by Peter Kirwan on 8 February 2010 at 14:52
Tags: Media

As inevitably as night follows day, the debate about paywalls started in earnest during early 2009, a few months after the collapse of Lehmann Brothers, and several months after online display advertising stopped growing.

Publishers have spent the past year obsessing about paid content. Yet in the meantime, something wholly inevitable and largely unnoticed has happened to online advertising. In the UK, the market entered recovery mode in Q309. During Q409, combined search and display revenues surged by 10.4%.

Double-digit growth (or something close to it) may even prove sustainable. In the US, eMarketer forecasts that online display will grow at 8.2% this year — faster than search.

Is something similar happening to online display CPMs? Last year, conventional wisdom insisted that the price publishers could charge advertisers for reaching 1,000 users had collapsed on a permanent basis, thanks to a vast influx of cheap display inventory. In a pro-paywall column written last month, the FT’s John Gapper laid out the contours of disaster:

Rates for online display ads have been falling steadily as competition has proliferated, with most sites now finding it hard to get more than $4 per 1,000 impressions on their pages (or $14m for the 3.5bn hits on all US newspaper sites monthly).

Yet other sources contradict this view, suggesting a recovery in pricing power. It’s particularly interesting that this evidence comes from the ad networks, who were blamed so aggressively in the first place for bringing vast amounts of new inventory on to the market.

Forrester offers a similarly surprising forecast for US online display advertising. Between 2009 and 2014, the analyst firm suggests, expenditure on online display will more than double, to $16.9bn.

Forrester forecasts that online display expenditure will grow by annualised average of 17% during the same period. Once again, that’s faster than the growth expected of search (15%).

Of course, these are just forecasts. There are plenty of publishers who still dismiss the long-term potential of online display (including, for example, Meredith Corporation, the US magazine publisher).

Yet there’s something more than rebound psychology behind these optimistic forecasts. There’s a widespread faith that Google will succeed in becoming a powerhouse in online display.

Notably, Google’s advertising exchange — a trading platform for advertisers and media owners — appears to be gaining traction. There’s even a suggestion that real-time bidding for inventory on ad exchanges forces up the price of impressions. Google — and its rivals — have always claimed that this would be the case. Perhaps soon, we’ll start to see hard evidence.

This apparent revival of online display comes at an awkward moment for those who are devoting all, or most, of their energy to erecting paywalls.

A trade-off exists between selling online advertising and building up paid content revenues. You can choose to do both. But you cannot hope to maximise revenues from both.

Perhaps paywall publishers will soon find themselves grappling with more than the challenge of getting readers to open their wallets. Soon enough, they may also have to fend off criticism that the recovery in online advertising revenues has passed them by.

Will the Guardian and Telegraph play nice again?

Posted by Peter Kirwan on 5 February 2010 at 14:28
Tags: Guardian Media Group, Telegraph Media Group

The ongoing spat between the Telegraph and the Guardian has been entertaining. But I wonder whether it might be drawing to a close.

In recent months, the Telegraph has become deeply interested in the Guardian’s financial performance, variously describing this as “grim”, “disappointing”, and “disastrous”.

The Guardian’s apparent inability to impose compulsory redundancies on editorial staff has become a favoured theme. In early December, the Telegraph spoke to one unnamed insider at GNM who described “highly-paid” staff journalists immune to compulsory redundancy as “bed-blockers”.

Another Telegraph story suggested that GNM employs so many editorial staff that “one features writer is reputed not to have had his name in the paper for more than a year”.

To be sure, Telegraph Media Group makes profits and Guardian News & Media makes losses – thumping great big losses. But why is the Telegraph so preoccupied with an unquoted rival whose fate doesn’t matter to investors reading the paper’s business pages?

Perhaps the answer lies in the pages of Media Guardian. In late November, Media Guardian ran a piece that portrayed Tony Gallagher, the Telegraph’s new editor, as the kind of Mail executive who destroys professional opponents after breakfast and eats their body parts for lunch — with fava beans and a nice Chianti.

Awkwardly, the piece suggested that Gallagher, during his long career at the Mail, hadn’t been averse to doing “all the things that the PCC wouldn’t allow you to do now”. One unnamed source told Media Guardian: “I can’t think of anyone in our profession that I would least like to cross the threshold of my home.”

Elsewhere, at the Observer, in early December, Peter Preston offered his best wishes to Gallagher, before going on to argue that the Telegraph’s “perpetual”, “slithering” circulation decline has been a problem since the late 1960s. The implication was that Murdoch MacLennan’s modernization project is pointless.

Sadly, the fun may be about to end. An unnamed source — yes, another one – insists that the Guardian “has no desire to compete in a tit-for-tat way” with the Telegraph.

Is that an olive branch being extended to the Telegraph? Coincidentally, Carolyn McCall, the chief executive of Guardian Media Group, gave an interview to the FT this week in which she suggested that GMG is coming “out of the recession very strong”.

“Yes we have made redundancies,” said McCall, “yes we have got the cost base down to where we want it now. . . They have done it, the GNM management are so on track. The Guardian is in good shape.”

Cumulatively, this sounds like an effort to draw a line beneath damaging coverage of the Guardian’s financial performance.

Whether the Telegraph takes the hint remains to be seen.

Times Online: Supporting the big profits of pay TV

Posted by Peter Kirwan on 2 February 2010 at 23:49
Tags: BSkyB, Media, News International

So Times Newspapers has just hired Paul Gilshan from BSkyB as marketing director. Gilshan was previously head of marketing for Sky Movies and Sky Box Office. At Wapping, Media Week notes, Gilshan will be reunited with his former boss Alex Lewis, who was a director of marketing at BSkyB before moving across to Times Newspapers last year.

Another significant (and much-noted) arrival at Wapping: Gurtej Sandhu, who is joining as director of Times Digital from News Corp-owned Star TV.

Down under, the trends seem similar: Richard Freudenstein, whose CV includes a seven year stint at BSkyB, has just been made chief executive of The Australian.

The influx of pay-TV types is striking. Of course, there’s an existing line of thought which suggests that paywalls around the Times and the Sunday Times will be engineered to boost print sales as much as anything else. (Buy a newsprint subscription and get access on t’internet for free.)

But what if the cordon was thrown wider? Peter Preston may have a point when he suggests that BSkyB could be brought into equation.

Now watch closely as 12 million Sky subscribers get an offer they can’t reasonably refuse. How about beyond-the-wall access to four big British papers (plus an array of tempting other goodies) for as little as 50p extra a month? £6m a month for that is £72m – in a trice the losses on Wapping’s more upmarket offerings are turned to profit. . .

This is an interesting idea. It would certainly enhance the attractiveness of Sky for subscribers who might be lured away soon by cheaper footie elsewhere. In addition, News Corp could bolt on newspaper subscriptions for a triple-play subscription offer (Sky/newspapers/online access).

Sky has been selling consumers a triple-play of its own (broadband/telephony/pay TV) for quite a while: the executives making the switch to Wapping know all about the fiddly mechanics of maximising profits in this kind of environment.

But if News International goes down this route, what price the coalition of national newspapers that Murdoch wanted to assemble last year?

That plan is dead in the water. It’s no coincidence that Murdoch’s thinly-veiled appeals for a concerted uprising against the free web have died away.

The Guardian can’t see how the economics stack up (no surprises there, if the missing ingredient is 12m viewers). The Telegraph has all but ruled itself out. DMGT has maintained a studied silence. Trinity Mirror might follow News International, but only if convinced by results on the ground.

A subscription link between Sky and News International would be designed to limit the risks of a go-it-alone policy. Harnessing the huge popularity of Sky might well make the unpalatable idea of paid content acceptable to the general public. (And for rivals, doing deals with Virgin Media or BT Vision really wouldn’t be the same).

But 50p a month: surely that’s too little? Selling online access to the Times and the Sunday Times at something like that price would cannibalize print copy sales just as rapidly as free access on the web.

Perhaps the low price point owes something to Preston’s inspiration: Newsday, owned by the same company that sells cable TV and broadband to 75% of Long Island’s subscribers. Late last year, Newsday erected a $5-a-week paywall. But it offered free access to customers of the parent company’s cable and broadband operations.

The parallel isn’t straightforward, though. Newsday’s paywall might as well have been accompanied by a suicide note declaring that the paper had no value other than as a gimmick intended to sell something else. Times Newspapers Ltd may be losing north of £1m a week, but its position is slightly different.

Still, leveraging what you’ve got makes sense. Cross-selling TV and news subscriptions would involve giving Murdoch’s newspapers – unloved by investors – a new purpose in life: to support the profitability of pay TV.

Circle the wagons and find some new and unexpected synergy: it’s a classic media conglomerate tactic. If successful, It might even help to convince News Corp’s investors that owning both newspapers and a pay TV platform remains a sensible idea.

Steve Jobs unveils his palace of Big Media dreams

Posted by Peter Kirwan on 27 January 2010 at 23:54
Tags: Media

And lo, the Jesus tablet came among us.

Predictably, the fan boy sites are focusing on the form factor and tech specs. It’s a 1GHz computer with a touchscreen interface. Apple will be making its own CPU (the technology involved is challenging, to say the least). Physically, it looks like an outsized iPhone, or an iPhone on steroids, as Mike Harvey suggests at the Times.

All of which (especially the latter) is somewhat beside the point.

The fascinating thing about the iPad, I suspect, is that it’s a completely new thing. (Bear with me while I explain this, and do try to try to ignore depressing precedents like the Newton and Bill Gates’ misadventures in tabletland.)

The iPod redefined an existing market that no-one had quite gotten right. The iPhone did the same for smartphones.

And the iPad? For Apple, it represents an attempt to carve out an entirely new market. . . for devices whose primary purpose is the consumption of content produced by Big Media.

Yes, you can prop it up on a stand and attach a keyboard, but no-one is pretending that the iPod is really a PC-style workhorse for tapping out emails and text documents.

Look at it, with its rather big 9.5” screen, and envisage its uses: gaming (without Flash as yet), watching streamed and downloaded films, surfing the web, reading e-books, playing music, reading the newspaper, reading beautifully-produced interactive magazines. . . Oh, and if we can get the iPlayer or Hulu or Project Canvas going inside it, and we’ve got TV, too.

The iPad isn’t a computer. It isn’t a mingy single-purpose mono-screen e-reader that looks like it was designed by a team of visionaries from British Leyland circa 1974. It’s a personal media centre, networked.

The iPad is built for immersive use while sitting on a sofa or lying in bed, rather than the hurly-burly of commuting. Apple will sell fewer of the expensive 3G models and more of the cheaper wi-fi efforts. Bad news, I suspect, for the mobile operators.

Oddly, Apple seems to be hiding its intentions, at least in part, when it describes the iPad – rather boringly — as “the best way to experience email, photos and video.” Better, perhaps, to downplay expectations.

Remember when cinemas were palaces of dreams? The iPad, I fancy, represents Steve Jobs’ effort to build something similar for media consumption in the 21st century.

Think of it that way, and it becomes obvious why Big Media so loves the prospect of this device succeeding. Display content inside a palace of dreams, and the content itself takes on the air of a dream. And dreams, as any fule no, are valuable things.

Steve Jobs has set himself up as proprietor of the cinema at the end of the digital rainbow. Happily, when Big Media looks at the iPad, it sees the opposite of the brutal commoditization and disaggregation that occurs on the web.

Price of admission? In 1937, it cost 10d to get into the average Odeon. The iPad’s palace of dreams will cost you $599. And don’t forget the additional cash you’ll be spending on the side to read journalism – like popcorn and ice cream — during the intermission. Everything you consume in the palace of dreams has a price tag, and the mark-up is usually significant.

The big question surrounding the iPad isn’t whether people will buy it. They will, by the millions. Apple’s costs are already covered.

The really big question is whether, in three years’ time, when the price of an iPad falls to $250/£250, Big Media will have a high-volume audience for paid content on its hands.

PS: It was inevitable, but it’s still astonishing to watch: the coverage is exploding. In the hour or so it took to write this, the iPad story count on Google News has gone from 25 to 5,993. What are the chances, I wonder, of Private Eye running a cover story with Steve Jobs as Jesus feeding 5,000 media executives?

Which newspaper bosses will oppose safe harbour for search engines?

Posted by Peter Kirwan on 12 January 2010 at 16:13
Tags: Media, News International, Telegraph Media Group

Our unelected upper chamber is going to work on Lord Mandelson’s Digital Economy Bill, which resumed its second reading in the House of Lords today.

Ralph Palmer, the 12th Baron Lucas and 8th Lord Dingwall (a.k.a. Lord Lucas) has tabled a string of amendments to the Bill. Cumulatively, they suggest ambitions that stretch beyond this peer’s day job as editor and proprietor of The Good Schools Guide.

Most of Lord Lucas’s amendments (and there are a few of them) sound like sensible attempts to blunt the more extreme impulses of the music business.

Lord Lucas has described the major labels as a “powerful, monopolistic” industry that “seeks to punish [consumers] before thinking of how to serve them better”.

Interestingly, the Tory peer is also proposing what sounds like a British equivalent of the “safe harbour” rules that protect search engines from news organisations launching copyright lawsuits in the US.

Specifically, Lucas proposes “a standing and non-exclusive license” that would protect search engines when they “copy of some or all of the content” on web sites and display them in search results.

Here, too, Lucas seems to be siding with the independent little man (in the shape of Google and the web surfing public) against “powerful” (if not quite monopolistic) media barons like Rupert Murdoch and Gavin O’Reilly.

On this basis, we were intrigued to see that the Lords’ Register of Interests lists Lord Lucas as a “significant shareholder” in Archant.

Can we therefore expect that Adrian Jeakings, the recently-appointed chief executive of Archant, will become the first British newspaper boss to state publicly that Google’s use of extracts in search results really isn’t a problem, after all?

Perhaps Murdoch MacLennan, the chief executive of Telegraph Media Group, will emerge to support him.

Certainly, Lucas’s amendment seems to have gone down well at the Telegraph Media Group, which remains famously friendly with Google.

Ian Douglas, the paper’s head of digital production, calls Lucas’s amendment “brilliant”, arguing that it will save “ill-advised newspapers” from spending millions of pounds on suing Messrs Brin, Page and Schmidt.

Equally, if Lucas’s amendment is approved, it remains unlikely that Google-hating newspaper bosses will remain above the fray. The chances of a lawsuit materialising has always been small: but the threat of launching one remains useful.

No doubt this thought has already occurred to lobbyists who ply their trade on behalf of Rupert Murdoch in and around the Palace of Westminster.

Freud vs. Ailes: A battle for the soul of News Corp

Posted by Peter Kirwan on 12 January 2010 at 14:18
Tags: News Corp

So here’s the sequence of events. In February last year, Peter Chernin, the boss of film and broadcast operations at Fox, quits News Corporation after 12 years.

This was followed by Roger Ailes, the newly-liberated chairman of Fox News, making a move against News Corp’s top PR man, Gary Ginsberg, who was an ally of Chernin.

Ginsberg and Chernin, we’re told by Michael Wolff, “saw themselves fighting the good fight” as “News Corp reformers” with a liberal bias.

Now we’ve got Matthew Freud, husband to Elisabeth, redressing the balance. Freud tells the New York Times that the Murdoch family is “ashamed and sickened” by Roger Ailes and his “horrendous and sustained disregard [for] journalistic standards” at Fox News.

The Daily Beast suggests that Freud “often maneuvers behind the scenes” on behalf of James Murdoch, chairman and chief executive of News Corp in Europe and Asia.

Wolff tells us that Freud’s statement was “a declaration of war”. Apparently Wendi, Rupert Murdoch’s wife, hates Ailes, too.

There’s only one problem with all of this, of course: Fox News currently brings home the vast majority of profits inside News Corp.

Last year, Ailes’ baby generated a reported $700m in operating profit. The Times speculates that Fox is more profitable than “CNN, MSNBC and the evening newscasts of NBC, ABC and CBS combined”.

Happily, News Corporation has $8bn of cash in the bank. For now, that’s a blessing: It would be enough to pay off every call a banker could make between now and 2015. But those cash reserves are piling up rapidly.

A recent analyst report from Deutsche Bank described the company’s “refusal to return capital to shareholders” as a “major hindrance”. Big decisions loom. In any kind of recovery, the company will be expected to put its dollars to work.

Most shareholders would prefer if these didn’t include an effort to buy the New York Times. Hence, no doubt, James Murdoch’s recent speech suggesting that broadcast entertainment is a “vastly more profitable and bigger opportunity” than news journalism.

The minimalist explanation for all of this politicking suggests that News Corporation is still struggling to re-establish equilibrium in the wake of Peter Chernin’s departure.

The maximum scenario involves something different: a struggle for the soul of News Corporation, post-Rupert.

With this many factors in play, Murdoch himself, who will be 79 in March, would be well advised to avoid walking under a bus at any point in the near future.

UPDATE: 14/01/2009: More from the excellent Michael Wolff:

There are four Murdoch adult children—representing the four votes that, after Murdoch himself, control the Murdoch family trust, which controls News Corp. While the four have their own divisions, they are as insular and tribal as any family can be—Kennedy-like, or mafia-like.

Wolff adds that the Murdochs view Roger Ailes as “a comic figure, a gargoyle, a crazy uncle. . . a burden, even a disease in the family, something to be dealt with”.

The clan, he argues, will have regarded as “untenable” the original suggestion by the New York Times that Ailes and Fox have become the profit-generating core of News Corp.

Wolff suspects that Murdoch himself gave the order to respond to Ailes by “blow[ing] a rocket up his ass”. Matthew Freud’s quote was that rocket.

Wolff’s observations on the Murdoch clan are fine-grained. Best of all, there’s this description of what happens when you fall out of favour with the clan:

The process of losing your job at News Corp. takes about a year. They talk about you, and isolate you, and then you understand that you’ve been exiled from the tribe.

Wham, bam, thank you mam: according to Wolff, the fate of Roger Ailes has been sealed.

Telegraph vs. Guardian: The mystery of 100 job losses

Posted by Peter Kirwan on 18 December 2009 at 14:20
Tags: Guardian Media Group

Guardian Media Group is hopping mad with the Daily Telegraph for revealing its discussions with Trinity Mirror about a possible sale of the company’s regional newspapers.

GMG has been stung by several aspects of the Telegraph’s story, including the allegation that the company is turning its back “on its heartland to keep the Guardian afloat”.

The Telegraph’s suggestion that GMG is engaged in a “fire sale” hasn’t gone down well either. Inevitably, GMG is also irritated by the fact that this story was written in the first place. GMG’s managers could do without the constant flow of leaks emanating from Kings Place.

But GMG seems particularly irked by the Telegraph’s suggestion that selling its regionals represents “a desperate attempt” to save 100 jobs at the Guardian and the Observer. No doubt that’s partly because the Telegraph’s claim opens up all of the old fault lines that exist between local and national journalists inside GMG.

But I was also intrigued by Roy Greenslade’s take on this. Yesterday afternoon, he offered up what sounded like a sanitised version of GMG’s reaction to the story:

There is no relation between those very separate matters. And there is no saving of those jobs.

The dispute is a bit mysterious. For a start, it’s not clear which “100 jobs” we’re talking about. Neither Greenslade nor the Telegraph have shed much light on this.

Are either or both of them referring to the 100 commercial jobs losses already planned? When it comes to redundancies, of course, numbers get thrown around with abandon. So perhaps we should be thinking about the 80 journalists who accepted voluntary redundancy at the Guardian and the Observer earlier this year?

If the Telegraph’s “100 jobs” includes all or some of these, this part of the story looks naïve. You don’t negotiate redundancy with 180 staff only to turn on a sixpence when Sly Bailey arrives in reception carrying a briefcase full of £50 notes.

But perhaps the Telegraph was hinting at something else. Perhaps it meant to suggest that selling the Manchester Evening News could obviate the risk of compulsory editorial redundancies at GNM when the division’s latest – and second – offer of voluntary redundancy ends in January.

Under the renegotiated house agreement that accompanied GNM’s move to Kings Place, the old prohibition against compulsory redundancies was set aside in favour of the idea that they might be possible “in extreme circumstances”.

Depending on how you look at the numbers, GMG’s cash position can be characterized as fairly extreme. GNM’s losses certainly qualify as such.

Compulsory redundancies remain a real possibility. If GNM tries to impose job cuts, a ballot for industrial action will follow. It could all get very ugly, very quickly.

But if GMG sells its regionals to Trinity Mirror for £40m, the NUJ will pursue the resulting logic. Surely that’s enough lucre to fend off a few dozen involuntary job losses? Surely £40m for GMG would make GNM’s situation less extreme?

Roy Greenslade’s suggestion that there is “no relation” between selling GMG Regional Media and rightsizing GNM’s cost base is made of wafer-thin stuff. Of course there’s a relationship. It’s called realpolitik, and it runs right the way through Kings Place.

Panic or logic: Selling off the Manchester Evening News

Posted by Peter Kirwan on 18 December 2009 at 12:50
Tags: Guardian Media Group, Trinity Mirror

In itself, GMG’s effort to sell its regional newspapers to Trinity Mirror isn’t surprising. The timing is interesting, though.

Only a few weeks ago, sources at GMG played down the chances of selling off the Manchester Evening News in the near term. My assumption was that a sale would have to wait until economic recovery took hold. But now we’re looking at “exploratory talks”. It’s easy to interpret this as a distress signal on GMG’s part.

In this respect, the Daily Telegraph didn’t disappoint yesterday.

Any disposal would amount to a fire sale because it is thought that GMG Regional would fetch less than £40m. Before the collapse in newspaper advertising, the Manchester Evening News alone was estimated to be worth about £200m.

Yes: but will the Manchester Evening News or GMG Regional Media ever be worth £200m again? If anyone believes this, I’ve yet to meet them.

Set aside the talk of a “fire sale” for a moment. At a deeper level, there’s some logic, rather then panic, in this potential deal.

If, like GMG, you’ve already made the decision to get out of regional publishing, now might not be a bad time to sell. The run-up in newspaper valuations has reached a plateau. The prospect of a double dip recession looms.

Remember, too, that GMG’s regionals are a sub-scale operation. The economies of scale being generated by Trinity Mirror are the only source of profits in a declining market. Even if GMG pours management time into its regionals, it won’t be able to catch up.

Perhaps, too, it’s better to sell small assets as consolidation kicks off. The alternative involves the risk that you’ll be left behind when the serious horse-trading begins.

A window of opportunity may well have opened on Trinity Mirror’s side. For a long time, Sly Bailey has looked like the only regional publisher with the wherewithal to initiate consolidation.

Plainly, however, Trinity Mirror has been fretting about the attitude of the Office of Fair Trading. The review of newspaper competition rules initiated by Lord Carter and carried out by the OFT did little to calm its nerves.

Now, however, the election of a new government is only months away. The Cameroons will take a more relaxed view of consolidation.

The City is increasingly impressed with Trinity Mirror’s Terminator-style cost-cutting. Investors might cut Sly Bailey some slack if it can beat GMG down on price.

This vision of jigsaw pieces falling into place with slick precision is tempting. But let’s not get too carried away.

GMG’s situation is tricky. Pre-tax losses at GMG reached £90m in the year to March 2009, and the company will deliver another terrible set of results this year. The company’s cash cushion has started to look uncomfortably thin.

But GMG’s situation isn’t all bad. It has tiny debts, and could raise cash from banks or investors on a temporary basis if required. Emap has its problems, but it’s too early to suggest that GMG won’t get a return on the £300m it invested there 18 months ago.

The Telegraph is within its rights to call this a fire sale. Yet GMG doesn’t need to sell at any price, even if Trinity Mirror appears to be the only interested party.

In deals, it’s the future, rather than the past, that matters. Companies are valued on a multiple of their likely future profits, discounted for inflation. If the value of GMG Regional Media continues to fall during the next decade, selling up for £40m in 2010 could come to be viewed as a smart move.

This is the possibility that should haunt local journalists everywhere. The emotions that stalked local newsrooms when DMGT tried to offload Northcliffe in 2005 are in play once again.

The silver lining, if there is one, lies in the opportunities that will be created by further consolidation. Cost-conscious bosses working at 10,000 feet create organisations in their own image. In the chinks and voids around the footprints of the last remaining giants, new business models will emerge — eventually.

Google + publishers: Push me, pull you

Posted by Peter Kirwan on 10 December 2009 at 19:59
Tags: Google, Media, News Corp

Alternatives to Murdoch’s Google strategy are emerging. The New York Times reports that Christoph Keese, head of public affairs and “architect of online strategy” at Springer wants to work with “Internet companies” to build a “one-click marketplace solution” for paid content.

Google or other Internet gateways would display links to newspaper articles, videos and other content from a variety of providers, as search engines do now. But some of the items would include something new: a price tag.

Meh: not terribly exciting at first glance. But this seems slightly more interesting:

Josh Cohen, senior business product manager at Google, said an online marketplace like the one envisioned by Mr. Keese was an “obvious extension” of the company’s previously announced plans to create an Internet store for digital books.

Google Books? Springer books? Google News? Paid content? Are we talking about content hosted and sold by Google on behalf of publishers? Google as a retail channel?

Surely not. But in the end, there’s no clarity: Josh Cohen, the overlord of Google News, brings down the shutters quickly, offering up the usual boilerplate: “It’s safe to say it’s a global discussion going on with a number of publishers. Publishers are still in the exploratory stages of this.”

We don’t know what News Corporation is up to behind the scenes. Yet Springer appears to be both collaborating with Google and kicking its ass.

For one thing, German publishers seem unafraid of playing the anti-competition card (something that News Corporation has chosen not to emphasise in its campaign against Google):

Publishers say pulling their contents out of Google News, or the search engine, is not a fair choice because of the company’s powerful position on the Internet, leaving them with nowhere else to go; in Germany, Google accounts for roughly 80 percent of Internet searches.

In addition, Angela Merkel’s government has promised an extension of copyright law that would prevent search engines from using text snippets in search results without paying royalties. According to the Times, the proposal has “broad support” among German publishers. No wonder.

In the end, we’re looking at the music royalties model. The Times reports that aggregators and search engines “might be required to buy licenses, much as restaurants, nightclubs or hair salons now need licenses to play recorded music”. A new rights body — much like Performing Rights Society — would carve up the euros and dollars.

Unworkable? Who knows? Deliverable? Probably not. Techdirt is deeply sceptical, suggesting that the proposal was “really designed to gain the current ruling party a bit of support from the mainstream press in Germany”.

Which seems to me to be the point. Google excels at flattering politicians. But newspaper publishers excel at frightening them. The latter technique is far superior.

In all of this, the level of emerging collaboration between rival media organisations is intriguing. The Wall Street Journal reports that Springer is going it alone, but the FT suggests that many others are working together:

Some of the nation’s largest print houses - such as Axel Springer, M. DuMont Schauberg, Verlagsgruppe Georg Von Holtzbrinck and WAZ Mediengruppe - are in initial talks about how to sell content on the web.

For English-speakers, there’s the (still somewhat mysterious) JV involving Conde Nast, Hearst, News Corp, Time Inc and Meredith.

Interesting times. Is the lay of the land shifting beneath Google’s feet? On certain days, it almost feels that way. . .

Annals of mutual incomprehension: Local newspapers and hyperlocal bloggers

Posted by Peter Kirwan on 10 December 2009 at 12:45
Tags: Newsquest

Patrick Smith from Paid Content went along to the AOP’s Microlocal Forum yesterday and came away a bit disappointed.

There wasn’t much at the AOP’s Microlocal Forum on Wednesday to suggest that either semi-amateur, entrepreneur-led start-ups or big-league newspaper publishers will make real successes of hyperlocal in 2010.

Well, no. But did we expect “real successes” so soon? Not really. As Smith says, we’re in the “foothills” of something new. The context may seem “auspicious”, but out in the real world, larger forces are at work.

Recently, Clay Shirky suggested that cities with less than 500,000 inhabitants in North America could look forward to a future of “endemic civic corruption” because no-one is watching the malefactors who are tempted to skim 5% off the top of everything that comes their way. (Mmm. Civic corruption? It takes two to tango, and the private sector is usually in there somewhere.)

“I think that’s baked into the current environment,” said Shirky. “I don’t think there’s any way we can get out of that kind of thing.”

Bloggers and hyperlocal sites are trying to fill some of these gaps. Hopefully, some of them will gain more prominence as part of the government’s independently-funded multimedia news consortia.

But at yesterday’s event, Paul Bradshaw criticised “one-sided partnerships” in which bloggers get little or nothing.

Roger Green, digital managing director at Newsquest, welcomed Bradshaw and the bloggers to the club. For years, he said, he has been having “joke meetings” with “people from no-name [mostly technology] start-ups who say we should help them start their business and pay them for the privilege”.

Collaboration is difficult. The grassroots translation is just as intriguing as the high politics.

Here in south London, where I live, Jason Cobb runs The Onion Bag Blog, a lively take on life and community politics in Lambeth (”the rotten borough”) and its hinterland.

Cobb has a deep affection for his neighbourhood, its people and history. The barbs he aims at Lambeth council are well-targeted. Local editors should be queuing up to employ him.

But Cobb’s recent discussion of a telephone encounter with a reporter on the South London Press points to the yawning gulf that exists between old and new, traditional and upstart.

The story starts with Cobb’s effort to interest an unnamed reporter from the South London Press in a local oral history project called Stockwell Stories.

Eventually, the reporter put in a call to Cobb. Here, according to Cobb, was his first question:

“Where is the borough of Stockwell?”

This isn’t desperately promising, because Stockwell tube station is only a couple of miles from the HQ of the South London Press in Streatham.

Next question:

“Why would you want to talk to local people?”

Well, OK: perhaps this was a provocative enquiry designed to elicit a passionate response. It’s been known to happen.

Unfortunately, things go downhill from here. Ultimately, there’s this question, which rolls down the copper lines toward Cobb in a manner that suggests it’s still 2002:

“What is a blog?”

Was Cobb talking to a staff reporter? Perhaps not. As one commenter points out, he was probably talking to a teenager on work experience “who may not have English as a first language let alone a familiarity with the geography of South London”.

Fair enough. But as Cobb asks: “Why allow someone to objectively report a local news patch, if by admission, they are unfamiliar with the area and struggle with the language?”

Good question. As Dan Gillmor noted long ago, the collective audience always knows more than the individual journalist. Cost-cutting tilts the balance even further in the wrong direction.

From Roger Green downwards, the dialogue between local bloggers and local newspapers involves vast quantities of mutual incomprehension. It’s there in the “joke meetings” between publishers and “no-name start-ups”. And it’s there on a phone line that connects Jason Cobb with the South London Press.

It’s also there in Cobb’s disdain for what he describes as the “cat-stuck-up-south-London-tree” agenda of Tindle Newspaper Group’s local organ.

Collaboration between local newspapers, bloggers and other “outside” contributors might seem like a sensible solution. Among others, David Montgomery, the chief executive of Mecom, assumes that it’s a natural progression for everyone.

No doubt this looks easy enough from Montgomery’s perch 10,000 feet above the action. But it’s going to take a hell of a lot of work, and big changes in attitude, to make it work on the ground.

(Thanks to south Londoner Adam Tinworth for the link to Onion Bag Blog.)