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Tuesday, 6 August 2013
The sales of the Washington Post to Jeff Bezos and the Boston Globe to John Henry raise the question why people would want to own newspapers if they aren’t doing so for obvious financial gain.
There are clearly people who want to own papers for political purposes so they can directly influence debate and policy. This is certainly the case for the ultra-conservative Koch brothers, who have been trying to buy the Los Angeles Times this past year. But Bezos and Henry don't seem to fit that mold.
Bezos’ purposes for buying the Post are not the pursuit of profit. He certainly would produce better returns putting more effort into Amazon or another commercial firm. John Henry can expect far more returns from effort in his investment firm or his sports empire than the Globe. So why are they buying legacy media?
The answers lie in human traits. All of us need diversions. We need toys to play with; things to spark our interest and imaginations.
Bezos can clearly bring ideas and expertise gained from shifting the mail order catalog concept to the web and contribute his innovative spirit to the Post.The challenges of learning the media business and trying to transform its distribution and operations are clearly interesting and attractive. And the price for the Amazon creator isn’t high.
John Henry doesn’t bring great digital expertise to the Globe, but he does bring strong organization, marketing, and turn-around skills and experience to the effort. He also has strong local community ties and bringing ownership back to Boston is a gift to the city. Especially because hating everything associated with New York is the city's pastime.
The newspaper ownership will also make both of them more respectable as citizens, not just as businessmen. There is a long tradition of wealthy U.S. merchants, industrialists, and traders playing citizenship roles in public life and philanthropy after achieving immense personal success. These range from Andrew Carnegie to J.P. Morgan and J. Paul Getty to Bill Gates.
Some who moved into public roles have done so to gain respectability that eluded them because of harm they caused while climbing to the top; other because of a genuine desire to make society better.
The sales of the Post and the Globe reveal a breed of owner who wants not just respectability or making contributions to society, but a place to use their knowledge and abilities to tackle new challenges. Whether it will help the newspaper industry remains to be seen, but it will at least inject new ways of thinking into the industry.
Wednesday, 17 July 2013
Ambient news is proving a significant challenge to news organizations trying to serve readers on multiple digital platforms and maintain their print and broadcast news operations.
Contemporary technologies all around us are now delivering breaking news, sports scores, and market updates on electronic screens and displays in elevators, taxis and buses, bars and restaurants, on the sides of buildings, through smartphones, and via social media.
In years past, we all had to deliberately turn to newspapers or radio and television newscasts, or at least glance at headlines at news stands, to get a quick overview of major events. That era is past.
Today news is free and ubiquitous and, unfortunately, provides all the news that most people want. This is bad news for those trying to provide news commercially.
In the past, newspapers and newscasts filled their space and time with non-news features and information designed to attract audiences that wanted only a little news. Most newspapers, for example, rarely carried more than 20 percent hard news during the past 50 years and provided a heavy diet of sports, entertainment, lifestyle and other diversionary content. Today, light news readers who formerly bought papers for non-news articles find plenty of that information for free on television and the Internet and they are abandoning newspapers and news broadcasts.
Those who remain the audiences of newspapers and new broadcasts tend to be heavy news consumers, people who want significant amount of news and serious information. They value the kind of news reporting that provides social benefits. Unfortunately, they are getting less and less of that news as publishers, news producers, and editors continue pursuing the audiences that have left them and are satisfied by ambient news. In doing so, news executives are leaving their prime audiences of heavy news consumers increasingly dissatisfied and without much incentive to pay the increasing prices needed to maintain established news organizations.
If print and broadcast news organizations are to survive and serve the purposes for which they were established, they are going to have to start paying attention to the audiences they have, rather than the audiences they wish they had.
Saturday, 27 April 2013
The European television industry is one of the most balanced in the world, with public service broadcasters, advertising-supported broadcasters, and pay television operators reasonably dividing television revenues among themselves. For the 27 countries of the EU, pay TV accounts for about 38% of total revenue, public funded broadcasters for about 34%, and advertiser supported television for about 28%.
Unlike the US where private television dominates, most Europe private television began after liberalization broke the monopolies held by public service and state television in most countries. It has taken decades for private television to establish a mature place in the market.
When looking specific countries, however, total spending on TV (advertising, subscriptions, public funding) is not evenly spread. Adjusted for population, it ranges between €5 and €30 per person among nations, with an average of €15. There a notable differences between southern, central, and eastern European nations and nations in the north and west of Europe, where public service and pay TV are strong players.
Some markets are skewed with unusually strong TV subsectors. In Germany and Sweden publicly-funded TV is unusually dominant; there is unusually poor performance of advertising-funded TV in Bulgaria, Estonia, Hungary, Latvia, Montenegro and Romania.
Today, pay television is the most positive sector in European television, with subscriptions for basic services and payments for video-on-demand services growing and the sector benefiting from the growth of video viewing on smartphones and tablets, particularly for its original programming.
Advertising-supported television is being squeezed between the more stable funding of public service broadcasters and pay TV providers and being hurt because advertisers in some countries remain reluctant to accept catch-up viewing in audience measurements for program broadcasts. It is not benefiting as much from video-on demand services as public service and pay TV broadcasters because much programming on advertising-supported TV is not original production owned by the broadcasters.
In order to survive in the new television environment, advertising-support TV in Europe has developed a diversified revenue, combining income from advertising, paid programming (home shopping, religious programming, etc.), product placement, sponsored events such as concerts and fairs, telecommunication promotions and services related to programming, income producing contests and lotteries, and renting studio space and providing video production services for advertising and corporate use.
Despite find their niches, both advertising supported and pay TV operators are now mounting efforts to obtain public funding to improve domestic program offering. In a number of countries they are asking policymakers to create contestable public funding to produce quality domestic content. They have asked cultural ministries to set aside funds for the purpose or asked regulators to divert portions of public service license-fee payments for the purpose.
In the contemporary environment, the business model of European advertising-supported TV needs significant addition, primarily because traditional TV advertising has low value for both viewers and advertisers today and there is a need to seek news ways to connect the two commercially. The extent to which they will rise to the occasion remains to be seen.