Is the business model for, or just to sustain, journalism?

Jack Lail expands on Janet Coats' essay which asks the perennial question: as old business models erode, how do we pay for the craft of journalism? A key point:

“For journalism to work, it has to prove its value to the community it serves, and proving that value means attracting business revenue – whether through advertising, subscription, or underwriting by an audience committed to the coverage your provide. Likely, it will be a combination of all those things, and more.”

No one talks much about what I call the “Girl Scout cookies” model.

Every year, seemingly everywhere, Girl Scouts sell cookies. They don't bake the cookies. They buy them wholesale and resell them at substantially marked-up prices, keeping the difference to pay for their activities. Everyone understands this.

Some Girl Scout troop activities might help the scouts learn how to bake — thus, their activities have some tertiary relationship to the products. Still, no one expects the scouts to supply the cookies they sell, and most buyers rely on the consistent quality and selections offered by the institutional bakers who supply the scouts' fare. A new box of Thin Mints? Mmm. Overbrowned sugar cookies produced by Troop 43, offered in a Ziploc? Uh, not so much.

So why do business-model builders always seem to expect the products of journalism to be so intimately tied to business activities that support its practice? At this stage of the game, must we force people to pay directly for a journalistic product or adjacency to it?

No. Here's why:

  • High-quality practice of journalism can create new brands or sustain old ones. (Note I do not say all high-quality journalism is practiced by the current crop of news media, nor will it be. Debate among yourselves.)
  • Those brands can carry enough weight with institutional leaders and business proprietors to get them to hear a sales pitch, at least. From established brands, they might expect to hear a pitch encouraging them to buy an ad adjacent to news product.
  • What is that ad if not a marketing service? And what are news media operators in the business community if not providers of marketing services? So why would we ever limit ourselves to selling marketing services in the form of adjacency to our news products? We can and should offer all the clever interactive tools and methods for business proprietors to get their messages of the moment in front of current and prospective customers.
  • We do not have to build marketing products or services ourselves, nor do we have to find audience for every client's message next to our content. Like the scouts, we can acquire and resell these things. In the interactive universe, media companies with a “build-it-ourselves” mentality fall behind, and remain behind, the best innovators in any category. Meanwhile, companies willing to form reseller relationships can gain leverage from the best-of-breed in every category.
  • Reseller relationships mean revenue shares, but in my experience, do not have to be loss leaders. Adding resale marketing services (low margin) to traditional ad adjacencies (higher margin) can yield a sum greater than the parts.
  • Such a marketing business can grow to help pay for journalism without relying solely on the ad inventory surrounding news product.

Let's see if I can close this loop in one sentence.

High-quality journalism creates credible brands that can open doors for us to sell, or resell, robust marketing solutions to business proprietors, at enough volume and profit over time to sustain the practice of journalism as old models erode.

I never said it would be a great sentence.

I'm also not yet ready to guarantee this will work, but I'd rather try it than continue depending solely on the value of news adjacency, or before even considering consumer-paid news content.

Netscape vs. IE was easier than this…

I have owned and used Apple products in one form or another almost continuously since 1986.

Love the products, especially (still) Macs. Starting to hate the company. It seems bent on forcing site proprietors back into a barbed-wire nest of incompatible platforms and user experiences. Cases in point:

  • Steve Jobs' well-publicized dismissal of Flash on the iPad and iPhone. Sure, HTML5 comes with boatloads of promise as an alternative, but the promise isn't reality just yet for anyone who would prefer to develop once for use everywhere.
  • The new Safari 5 includes a “Reader” utility that takes content such as a news article and strips all but the core content (text, headings, related images) off the display. No page headers, no banner ads, no unrelated objects — all to recast the user experience to Apple's specifications instead of the site designer's. Sure, I know people hate banners, mostly, but they still pay the freight for a lot of content sites. How quickly will someone invent a workaround?
  • Apple's protectionist policy regarding mobile advertising, which will exclude some major mobile ad nets such as Google's AdMob, also crimps the revenue-share potential for publishers who rely on those nets to help cover costs of mobile deployments.

Now anyone running a network of content sites has to build them one way for the “open” Web, another for Apple platforms, variants for mobile form factors, and then style and script one-offs or variations for all the incompatibilities that have existed since the dawn of the Web. Meanwhile, the rules of engagement in each of those instances keep changing. John Battelle, in that last linked post, has choice words on that:

I think this is shortsighted and wrong. I also think it's classic Apple. It's a rerun of the Us vs. The World mentality that forced the Mac into a corner back in the late 1980s. This time, Google plays the role of Microsoft, but it really doesn't matter. Apple won't let anyone play in their iWorld who might pose a competitive threat.

This is all we need now – a major platform war, with marketers and developers having to pick sides, cost of development, ad serving, analytics, and marketing services at least tripled (one process for Android, one for iPhone/Pad/Touch, one for Microsoft or Palm/HP or…. ). That's not what the web is about. It's disheartening.

And it will be expensive for site proprietors. Just what we need.

Update (11:15 a.m. EDT, 6/10/2010): Robert Andrews has a great post somewhat related to this: The Anti-Web Movement Is Gathering Pace. Also, Mathew Ingram, over at GigaOm, explores the Safari Reader feature further: Let's Get Serious: Safari Reader Is Not The Death Of Media.

U.S. catches, passes world in mobile

Ten years ago, when I worked in consumer electronics, we coveted the advancements in mobile networks and the handsets they supported in Europe and Japan. Better mobile Web, better games, better communications, just better, better, better.

Back then, the multitude of not-yet-consolidated regional carriers in the U.S. scrambled to put up four towers on every peak, even if only one could support the entire mobile user base. We all carried handsets not much more comfortable or functional than Gordon Gekko's brick.

Today, in a report discussed at GigaOm, we learn that nearly 70 percent of U.S. cell phone subscribers are on a 3G network — best rate in the world. And all four of the nation’s top carriers are among the top 10 in the world making money from mobile data revenue.

Sheesh. I slip out of the conversation for a decade, and look what I miss. 😉

iPhone app buys: Games, yeah! News, not so much

GigaOM reports (with chart) data from Apptizr showing percentage of paid iPhone applications by category.

Games rule. They represent 16 percent of the apps in the App Store, but 29 percent of the paid downloads. Entertainment also outperforms its presence in the store: 12 percent of available apps, but 22 percent of the paid downloads.

So those two pastime categories represent more than half the paid applications on the iPhone platform.

News applications — like the ones many of us rushed to build whereby we could scramble our venerable headlines and teasers into Yet Another Interface — represent 2 percent of the available apps but only 1 percent of the paid downloads. I suppose journalists can take some comfort, though, compared to other writers. Books make up 18 percent of available apps but only 3 percent of paid downloads.

Leaving no niche un … notched?

I admire the notion of “competing against nonconsumption” put forth by the disruptive-innovation gurus at Innosight. I spent a lot of time — and the company spent a lot of money — in my last job trying to find product niches where such a seam of opportunity existed.

As I pass my 15th year in interactive services, though, I struggle more to find any online niche untapped, any opportunity to consume unfulfilled by someone, somewhere on the Internet.

I used to joke, and now say seriously: Every new interactive product already has competitors.

A new case-in-point popped up in a 30-second TV spot on a certain home-improvement oriented cable net last weekend:

Landscaping-challenged folks may not know that pine straw from the great Southeastern forests makes a good mulch material. In East Tennessee, where I live, one can buy it in little bales at garden shops and home centers. A little farther south, in most parts of Georgia, one can just rake it up from under the almost-inevitable stand of pine trees in one's own yard.

It never occurred to me that demand for the fragrant little needles arrived at a level where an e-commerce Web site could not only exist, but afford TV spots. But here's what claims about itself:

“The Pine Straw Store ships pine straw mulch (pine needles) to homes and businesses in all 50 states. We are the premier Internet supplier of pine straw in the United States and we only ship out the finest of pine needles.”

So I wonder: Does the USDA have some kind of grade scale for pine needles to distinguish the finest from just pretty-good? And, more to my concern, does represent a point of granularity where all profitable niches are hereby occupied?

The kids learn, and teach, a lesson in sales

Last year, longtime pal and former boss Rusty Coats reminded me of the concept that sales success is algorithmic.

Presuming you're selling a product with any demand whatsoever, a certain number of phone calls will lead to a predictable ratio of appointments, then a certain number of appointments will lead to a predictable ratio of contracts. The more activity, the more you close.

My twin teens extraordinaire, Rachel and Tyler, demonstrated this concept over the past week.

R&T turned 16 in November and promptly secured (a) their driver licenses, and (b) access to an old (pre-recall) Toyota to tool around town — on one condition: Get jobs and help pay for fuel for the hoopty.

So they “tried,” by which I mean they put in maybe five applications apiece to places where they thought their first jobs might suck less than most first teen jobs do. Tyler, the gamer, checked out GameStop. Rachel tried Claire's Boutique and Icing at the mall.

In their defense, the part-time job market remains tough, and adults in some cases take jobs that otherwise might be open to teens in school.

Even so, the twins did not exactly push hard for jobs. They actually believed the managers who told them they would call if any jobs opened up, and keep the applications on file. Like that ever happens to teens looking for part-time work, right?

Weeks passed … Thanksgiving … Christmas … New Year's. I started my new job and an aggressive initial travel schedule, so ol' Dad wasn't much help. Ever-resourceful Ka finally encouraged them to volunteer at the Knox Area Rescue Ministries thrift store, helping check in and stock donated merchandise, until they could find paying gigs. KARM, magnificently, took them on and provided references for their job searches.

And we kept nudging, cajoling, advising, talking about getting jobs.

Last Saturday, we had talked about it enough. I piled R&T into my own hoopty (still disoriented by the fact their car has 40,000 fewer miles on it than mine), and took them to more than 20 storefronts apiece to walk in and ask about jobs.

I gave them specific instructions: Ask for a manager. Look her/him in the eye, and ask if she/he has any openings now or soon for 16-year-olds. Get an application whether the answer is yes or no. Get her/his phone number and full name. And ask when you should call to follow up. Write it all down as you go.

Well, praise be, they wore themselves out but did as I suggested. Then they followed up with the managers who showed interest. My kids got over call reluctance, sold their abilities and found the demand.

By Tuesday night, Rachel closed the deal with Steak'N'Shake, where she started training to work the drive-through. By Wednesday night, Tyler earned his new appointment as a busser at Texas Roadhouse.

So, Rusty, thanks for a lesson I could impress on my kids. More activity leads to more sales. And to gas-and-movies money.

My tremendous new opportunity

In rare quiet moments, Ka and I sometimes talk about how change and upheaval seem to be such constants in our lives. We tell ourselves we'll be glad when things slow down. Then another shoe drops, or absent that, we seem to go out and find some new way to stir things up.

A big shoe dropped this month, and now I can tell you about it:

I will join Cordillera Communications effective Jan. 11 as its president of interactive. Cordillera owns 13 television stations in mid-size markets including Lexington, Ky.; Tucson, Ariz.; Colorado Springs, Colo.; San Luis Obispo, Calif.; and several cities in Montana.

Friends and family know I have aimed myself at just such an opportunity — leading an interactive media growth business — for years, more so recently as I wrapped up my MBA. When the Cordillera opportunity presented itself, the more I learned the better fit it became. I am so grateful to Cordillera for this chance and will work tirelessly to bring in success.

Even better, we get to stay in Knoxville and see the kids through their years at Bearden High School (go Bulldogs!) and East Tennessee State University (go Bucs!). I'll travel a lot for the job, but that's no change from my life for, oh, 12 years or so.

The other side of this change smarts a little, though: Leaving The E.W. Scripps Co. means leaving the greatest interactive team I have known in 15 years of “doing online stuff” — and that says a lot when you consider the many talented folks I knew at Belo Interactive and Central Newspapers. I told my team leaders this morning I owed this opportunity to them — they made possible all our successes these last five years. I look forward to seeing many great achievements from them in the coming years, and comparing notes over a few friendly beers from time to time.

Being resourceful vs. being a resource

Pin this on early-Monday-morning syndrome (if you haven't figured this out by now, I often write posts in the margins of my day, then set them to go live a few hours later when I figure folks are awake and paying attention). I meant, in that last post, to explain a key difference between the reasons people wanted my help as a consultant, and the reasons they should have. The distinction should matter to hiring managers in today's economy, and it applies far beyond my little world. So it's worth another post.

Most of the time, people solicited my help (and I served) as a resource. They wanted someone to design, build, and/or operate something for them.

They should have solicited my help (and I should have encouraged this) as a resourceful person: someone who can find the best tools, components and methods to design, build and/or operate something.

A resource can build you a Web site. A resourceful person can instead find you a dozen suitable systems, or hosts, or templates, or stock images, or even bits of suggested language. A resourceful person gives you choices and helps you find your way to the best combinations. That's usually faster and better than inventing in isolation.

In an interactive economy where so many great components already exist, where core components of contemporary functionality have already been invented, in many cases you simply need a resourceful person to tie it all together. That same reasoning could apply to hiring and contracting across many industries.