Google Becomes a Bunny thats Cuddles
September 11, 2009
I was surprised to read in several different stories that Google is tossing olive branches left, right, and sideways. Even the Google is savvy enough to know when lots of guns aim at Googzilla. Googzilla is tough but Googzilla knows that Gulliver ended up hogtied with some small people standing on his forehead. You can get a sense of the shift by reading Wired’s “Amazon Scoffs at Google’s Offer to Share Book Search Sales”. The article explains Google’s olive branch and the Amazon response.
Several comments:
- I think the Google has realized that it may have a fight on its hands with or without its controversial settlement.
- Google’s cavalier attitude may have contributed to the controversy. Its attempts to assuage fear takes place as the company hops in the sleeping bag with Sony, a company with an interesting track record in treating its paying customers with respect.
- The amount of money sunk into the Books project is now sufficiently large that Google wants to craft some type of deal without pushing the button on thermonuclear information war; specifically, Google could go directly to authors and become a publisher. Google can promote, deliver, and collect for these original work.
My hunch is that Google is going to give the Cold War tactics a try. But that button is sitting there begging to be pushed. What happens if shareholders demand that Google maximize its revenues by becoming a full service, vertically integrated publisher. I would jump from my four publishers to Google in a heart beat. The Google can definitely sell online. Someday maybe?
Stephen Arnold, September 11, 2009
Google Throws Life Preserver to Newspapers Again
September 10, 2009
The Google assumes that users will “get it”. As a result, the company is not into bicycles with training wheels. The newspaper industry got thunked on the head with Google’s approach. Now the company has inflated a big, yellow kiddy duck and pushed it toward the newspaper industry. You can read the story in the Nieman Journalism Lab story “Google Developing a Micropayment Platform and Pitching Newspapers: “‘Open’ Need Not Mean Free”. Not much to summarize. Google is pretty good at microbilling, so in my opinion, the Google flipped some bits and inflated the yellow kiddy duck. Will it be enough? I don’t think so. Three reasons:
- The cost structure for news is going to be tough to “blogize”; that is, generate good info with new content methods
- The newspapers will find themselves competing with other folks who are generating “good enough” content, content to survive on fame, AdWords, or a sponsor
- Google itself has some nifty content combinatorial tools. When those are made available, software – not humans – can generate some nifty outputs. I describe some of these in my Google: The Digital Gutenberg.
So, the duckie is there, but it won’t get some newspaper publishers out of the deep end. Quack.
Stephen Arnold, September 10, 2009
The Pogue Problem, Maybe the Future Opportunity?
September 8, 2009
I am not a journalist. I don’t have the first clue about what goes on in journalism classes. I don’t think the university I attended had a journalism department. True, I worked at a newspaper and at a magazine publishing company, but I was more of a manager / nerd type, more concerned with cutting costs and generating revenue than writing about the hoe down at the local courthouse or the school board meeting. Now I write a Web log that is nearly 100 percent marketing beef. I do commercial work, but that is a very different way to monetize my knowledge, as modest as it may be.
As a result, I look at publishing in a way that is different from and often incomprehensible to those who are trained journalists. Here’s an example. TechCrunch published a very good story “Losing Its Religion: the New York Times Compromises”. I understand the point of view that a reputable, traditional newspaper should make the distinction between news and advertising. I think Mr. Arrington’s write up puts a nice cap on the “Pogue problem”. Mr. Pogue is an author, a lecturer, and a columnist. He gets very excited about Apple products. Mr. Arrington writes:
The NY Times ethics policy also says “When we first use facts originally reported by another news organization, we attribute them.” But in our experience that isn’t always the case. The one thing the NY Times has is its brand and its people. They aren’t first to stories but they generally get things right. Trying to hide conflicts of interest hurts that brand, particularly when they hide, hypocritically, behind an ethics statement that prohibits the behavior they’re hiding. It’s far better to keep everything in the open. Transparency is what’s important, not appearances.
I don’t disagree with Mr. Arrington’s viewpoint. I want to stretch and idea in a different direction.
What I see in the “Pogue problem” is an opportunity. In my view, the “ethics” that were spelled out when the New York Times was rolling in money have been marginalized. The New York Times does not have the money or the staff to ride herd on the people who generate content. My recollection is that the New York Times and I believe the Washington Post ran stories that were, in effect, mostly made up. In the good old days of the newspaper wars, the moguls would create news. The “ethics” that major papers enforced were largely a reaction to the some of the more creative ways newspaper moguls handled the news in the good, old days. For many years, newspapering was lucrative. People read newspapers at the breakfast table and then on the subway or tram ride home from the mills outside Chicago and Philadelphia. Advertisers wanted to reach these people and the newspaper was the only game in town for a while. Eventually radio and TV came along and newspapers jumped into these channels. Some were successful like the Courier Journal & Louisville Times Co. where I worked for many years. The CJ< was a monopoly and Mr. Bingham had a letter from some higher legal authority that said it was okay for the CJ< to own TV, radio, commercial databases, direct mail ham outfits, door knob handing distribution companies, and printing plants that handled the New York Times Magazine when it was done via rotogravure. Life was indeed good.
But those days are gone.
Newspapers have not been able to make the leap into the channel broadly described as “new media” or “the Internet”. Sure, there are some marginal successes like the Wall Street Journal Online, but I take the hard copy of the paper and I get spam every day to urge me to subscribe again. The New York Times had a sweetheart deal with LexisNexis. Then the NYT pulled the plug, blew a million in royalties, and sank another dump truck of millions in its largely ineffective money making online efforts. The CJ< made money in online as early as 1981, yet when I talk with publishing executives, I get the “what do you know” treatment. Well, I know that the CK< knew how to make money online because I was there and contributed to that effort. I have a tough time taking the feedback I get from publishers about online seriously. Clueless is the word I use to describe most of the meetings I attend.
Now back to the Pogue Problem. I think the idea that troubles some people is that Mr. Pogue is close to Apple, so his objectivity is skewed. Let’s think about the upside of this model. In fact, forget Mr. Pogue, let’s talk money.
First, if the newspaper or any other publishing company has a way to get money from people who have money, the company—if it is publicly traded—has an obligation to figure out how to take this money without running afoul of the law. This means that if it is necessary to create a new type of editorial product, then that product should be created. If the person who writes the auto column stuck behind sports in the Sunday New York Times gets a request to write about a particular car, why not figure out how to sell that “content hole”? Make the deal a transaction and take the money. This happens with consulting firms who sell slots in industry charts. It happens at trade shows where those who buy booth space get to be speakers. One trade show organizer told me, “I don’t know how I can get all the exhibitors a speaking slot on our program.” Google is predicated on selling messages to people. This model deserves greater consideration among traditional publishing business thinkers. Yep, sell advertising messages in the form of “news” and “opinion”.
Second, the problem is that publishing companies have reinvented themselves and their business model. The only problem is that the revenue part and the cost control part have slipped through their fingers. What’s left is a business method that does not match with today’s fast changing world. What were the ethics of the newspaper companies at the turn of the century in New York? What were the ethics of a Barry Bingham in the 1980s? Those times and their “ethics” don’t match up with today’s opportunities. Therefore, change the definition for “ethics” and explore and possibly seize certain opportunities.
Finally, the journalists who follow the rules often find themselves under great pressure. When costs get chopped, some journalists have to turn to new types of research or information collection methods. These folks write pretty good stories, but they user different tools and methods. I can’t get too excited when a journalist uses blogs instead of telephone interviews. When was the last time you were able to get someone on the phone straightaway. Even my wife’s phone rings to voicemail. For my kids, it is SMS or nothing. When these new methods collide with a journalist who is trying to do the best job possible given the constraints, I cannot get worked up when a story is off base or a personal view gets into the article. My thought is to find a way to accept these changes and charge for them.
In summary, the Pogue Problem should be explored as the Pogue Opportunity. How can these situations be monetized. If the demand it there, my thought is that information companies have to consider how to deal with the opportunities, not react reflexively. If new sources of revenue are not found, the problem takes care of itself. Change is needed; new classes of information products and services are needed; and fresh thinking has to be brought to this new opportunity space.
Just my opinion.
Stephen Arnold, September 8, 2009
Mudoch’s Vision Gets a Poke in the Eye
September 6, 2009
The International Business Times ran a story that poked Rupert Murdoch’s plan to charge for news square in the eye. The story you may want to read is “Charging for Web Content No Panacea for Newspapers” suggests that charging for content may not solve the woes of the traditional newspaper industry. The IBT writer marshals some interesting information. For me the most important comment was from a small consulting firm:
Ken Doctor, who leads Outsell’s news publishing research, says publishers need to be more imaginative about how to make money out of news. “The news industry has this myth … that there’s no money online,” he says. Doctor says online ads targeted at particular audiences, which offer better value to advertisers than traditional display ads, still have a long way to go in generating revenue. Better intelligence about consumers’ habits on the Web — while it can be controversial to gather — can lead to far more relevant and powerful advertising campaigns. And rather than asking readers to pay for content, publishers should consider extra-value services like membership schemes, something the Guardian is looking at, he says. “The smart play here is to go with human psychology and not against it, and that is convenience, access, sharing, better social networking connections,” he says. “And you’re forging a deeper relationship with your readers.” Doctor cites as examples of companies that learned early how to make money online Elsevier scientific publishing and Google – the bogeyman of the news industry.
Let’s think about several of these points.
First, the money online requires competencies that the newspaper has not evidenced recently; namely, technical capabilities and financial wizardry. Google’s magical recipe for online revenue leaves other online vendors in the dust. Newspapers have a different definition of technology than an outfit like Google. And Google’s money making method is based on traffic, math, and timing. The consulting firm’s expert is saying words that sound okay, but the gap between what a newspaper can do and making sufficient revenue to return the newspaper industry to its hay days is wide indeed.
Second, the idea of using information about readers is an interesting one. First, the newspaper has to collect useful, high value information. Circulation databases are described as “crown jewels” and the ones with which I am familiar are more like the cubic Zirconias for sale on Fisherman’s Wharf from a street vendor. The high value data requires the core competencies referenced in the preceding paragraph. Without these competencies, the likelihood of doing much beyond the status quo with subscribed data is going to be tough.
Finally, monetizing “convenience, access, sharing and better social networking” sounds great, almost like the silly McKinsey report I wrote about a few days ago. Here’s the problem. “Convenience, access, sharing and better social networking” are already available and becoming more convenient and better by the day. Companies with these types of systems – Murdoch’s own MySpace.com, Facebook.com, and Twitter.com to name three – have to find ways to generate big time revenue. No one has cracked revenue from certain types of online services that is demonstrably sustainable. Instead, social systems seem to wax and wane. Maybe the solution is a giant Microsoft of Google system. But if that takes place, will the newspapers be much more than marginal players? I don’t think they will be much of a player at all. In the area of local information, it sure looks to me as if Craigslist.org and Yelp.com have stomped the traditional newspaper into the dirt.
What I find amazing is that the baloney from blue chip and azure chip consultants never ends. The cherry on top the cupcake of baloney in the consultant’s comments was the reference to Elsevier. Perhaps Elsevier looks healthy because it is a private company and not required to disclose its financial details. A better example would have made this addled goose quack happily. As the consultant’s analysis stands, the addled goose says, “Honk.”
Stephen Arnold, September 5, 2009
Google, Prediction, and Privacy
September 6, 2009
Google is pretty good with predictive mathematics. When I read “Google Urges Support for Proposed Books Settlement,” I was confused. Then I remembered that some Google attorneys work in temporary trailers about a mile from the nerve center next to the employee car wash. The math and physics folks are in the Googleplex. The lawyers are around, just not sprinkled among the wizards. Not surprisingly, the firm’s predictive expertise flags when dealing with matters such as privacy. For example, consider this statement from the article cited in this blog post:
“As we noted in our letter to the FTC, because the settlement agreement has not yet been approved by the court, and the services authorized by the agreement have not been built or even designed yet, it’s not possible to draft a final privacy policy that covers details of the settlement’s anticipated services and features,” Horvath said. “Our privacy policies are usually based on detailed review of a final product — and on weeks, months or years of careful work engineering the product itself to protect privacy,” she said. “In this case, we’ve planned in advance for the protections that will later be built, and we’ve described some of those in the Google Books policy.”
I think I understand. No predictions and “usually”. Maybe the math folks should help out the law folks.
Stephen Arnold, September 6, 2009
Wall Street Journal Spam Campaign
September 2, 2009
Short honk: The Wall Street Journal’s desperate and confused marketing mavens have resumed their spam attack on me. I received another spam email urging me (already a subscriber) to sign up for two free weeks so I will become a double subscriber. As I have reported, the fragile publishing sector is struggling to find a way to generate enough revenue to pay for the 16th century business processes that abound in book, newspaper and magazine companies. Spam is the life preserver at hand. I wonder if the Wall Street Journal crowd has looked into the production companies cranking out the Viagra ads on late night television? Perhaps that is next?
In case you have not seen this bold spam message, here’s what I received this morning (September 1, 2009):
Lovely indeed. I am certain it is highly effective when sent to those who are already customers. I wonder what the WSJ sends to those who are * not * customers. The thought frightens me. I don’t see “red”. I see failure and I think of “red ink”. Publishing companies have quite a bit of that flowing through their books I suppose.
Well, for now I must report that my calls, my letters, and my emails have been ignored by the Wall Street Journal. If I were a real journalist, I suppose I could approach an executive at one of those upscale clubs and just ask to be spared the endless “Two weeks free” emails. Alas, the addled goose will have to document the plight of the publishing companies in this modest Web log.
Stephen Arnold, September 2, 2009
A French Publisher Now Understands the Disruptive Force of eBooks
September 2, 2009
This Web log does not do news. I have hinted that publishers are in a flow that leads over Niagara Falls. Happily a “real journalist” has published a “real” article on this situation. “Book Publisher: e-Books Will Be Our Downfall”. Jordan Golsan is recycling some information, but that is the way in which information moves around the datasphere. For me, the most interesting comment in the write up was:
Regardless, Nourry [French publishing executive] has a point. He claims that retailers like Amazon are paying more than $9.99 for each e-book, thus selling them at a loss. He goes on: “That cannot last…Amazon is not in the business of losing money. So, one day, they are going to come to the publishers and say: By the way, we are cutting the price we pay. If that happens, after paying the authors, there will be nothing left for the publishers.” It’s not clear if that is true or not, but we do know that Amazon takes 70 percent of newspaper and blog subscriptions on the Kindle, with only 30 percent going to the content maker. Further, is it really a bad thing if the publisher is left out in the cold? Reading the rejection letters of hit authors makes one wonder what need there is for publishing houses at all, in the age of the Internet. That’s what Mr. Nourry is so worried about. He is terrified that authors (and Amazon) will realize that they don’t really need his industry to get things done.
In my opinion, the river of red ink is rushing forward. I wonder what global company offers a full service “digital Gutenberg” for authors to use—no traditional publisher required, of course?
Stephen Arnold, September 2, 2009
Scripps Runs the Deckchairs on the Titanic Play
September 1, 2009
Short honk: BizJournals.com’s “Scripps Restructures Newspaper Division” reported a reorganization of the Scripps’s newspapers. I did not understand the distinction of regional and mid-sized newspapers. Now I get most of my information in electronic form. Upon reading the news item, I thought about the band playing as the Titanic’s passengers boarded life boats and the crew’s moving deck chairs around in the 1958 film “A Night to Remember.” Just my opinion.
Stephen Arnold, September 1, 2009
News Corp versus the BBC, Internecine War Brewing
August 31, 2009
Read the BBC news story “Murdoch Attack on ‘Dominant’ BBC. Note the following comment:
Mr Murdoch (the son, not the big dog) said free news on the web provided by the BBC made it “incredibly difficult” for private news organisations to ask people to pay for their news. “It is essential for the future of independent digital journalism that a fair price can be charged for news to people who value it,” he said. News Corporation has said it will start charging online customers for news content across all its websites.
In a high class mud slinging rejoinder,
Former BBC director general Greg Dyke said Mr Murdoch’s argument that the BBC was a “threat” to independent journalism was “fundamentally wrong”. He told BBC Radio 5 live: “Journalism is going through a very difficult time – not only in this country but every country in the world – because newspapers, radio and television in the commercial world are all having a very rough time.”
Quite an exchange. Both outfits find themselves in the headlights of users who are embracing different methods of getting information. The likely escalation? Knitted brows and hard stares at the country club.
Stephen Arnold, August 31, 2009
Google: Last Library
August 31, 2009
Cade Metz’s write up “Google Book Search. Is It the Last Library? Uh, Yes.” will cause some excitement among the anti Google Book contingent. Mr. Metz, like most Google watchers, is a bit like a Kentucky Derby horse when the gate opens. The stallions charge forward. The race is exciting, but it is tough to pick the winner until the first horse crosses the finish line. So, the race is on.
My thought is that Google and its book program is old news. I think that books are going to lose traction in the years ahead. I like books, but the costs and environmental impact suggests that books may become less a mass medium and more of a collectors’ sport.
I do not think Google is the “last library”, however. I think that Google’s focus is on the past. The future is in new types of content. I know the arguments for books. I have written eight or nine myself. Google’s vision for books is likely to distract some folks from watching other and, in my opinion, more important initiatives at the company.
Let me cite a couple of examples and then remind you, gentle reader, that this information appears in my Google studies which are for sale as PDFs from Infonortics.com. Here you go:
- Google’s push into education. This is a big deal and books are a contributory stream, not the Mississippi River that is being carved by the Google glacier.
- Google finances or what I call Google Global Bank. Check out Google’s array of money-related services. Big doings in that sector.
- Google and the motion picture sector. The teaming with Sony is one leaf on a fast growing evergreen.
Google Books is a hot topic, but like many Google tactics, the excitement makes it difficult to see other disruptions the Google is setting off. If Google quit scanning books tomorrows, how many authors would assign Google copyright so that Google could sell their books to Google search users? I know I would toss my four publishers overboard in a heartbeat. Google can sell. Getting rights directly from me eliminates a problem and snags the higher value current information to boot.
Stephen Arnold, August 31, 2009
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