Thursday, February 26, 2009

Why newspapers are dead

The demise of printed newspapers is getting a lot of ink lately. People's primary psychological reaction to this news is nothing more than nostalgia. Journalism will survive the death of the medium.

The main news wires are ironically most responsible for the wholesale migration of newspaper readership to online. You can get an AP or Reuters story on Yahoo! as soon as it hits the wire. Why wait until tomorrow when the story is old news?

Newspapers' top remaining niche was local. However, their local revenue has been destroyed by Craigslist and will be further eroded by effective local mobile advertising.

Another niche will be quality reporting and investigation for time-starved intellectuals that summarizes important stories and filters the online thrash and bias. Think The Economist (though it's free online now too). Another niche will be underreported foreign news and analysis for expats and sophisticated readers. Think a more engaging Foreign Affairs. But these will be weeklies, not dailies.

My personal rebellion against newsprint has 3 primary sources: the unmanageable broadsheet (they should have gone tabloid style long ago - it's even cheaper to print), inky fingers and stains (yes, even with modern inks), and the AP's insulting repetitive inverted pyramid style (and single sentence paragraphs) designed to make it easier for an editor to cut a story short to fit column inches than for readability. A secondary complaint is the "continued on page 5" phenomenon. That's probably OK for the front page (get more headlines in front of the reader), but once inside, stop making me jump all over the place to finish a story.

Thursday, February 19, 2009

Wrapping your head around Web 2.0

Just as some declare that Web 2.0 is now passe, others are still trying to figure out what it is, and how to employ it.

For marketers, Web 2.0 means you get to have a conversation with your customers and learn more about their passions. For advertisers, it means you can no longer pitch products with one directional messages. For brand managers, it means your customers own your brand and are talking about it in ways that you might or might not like. For direct marketers, low response rates means Web 2.0 (at least the social networking and widgets part of it) hasn't lived up to the hype.

For software engineers, Web 2.0 meant you could easily get your hands on lots of great data and make it do what you wanted, or make other things out of it - but this posting is for the marketers out there.

I've found one of the road blocks to expanding into a Web 2.0 strategy is educating management on what exactly Web 2.0 is, and how it can help the company. Engaging directly with communities of customers is a new and scary concept for old school executives and PR agencies.

Here are a few resources that might help you educate others on what Web 2.0 even is, and how it can be leveraged (I'll add to this list from time to time as I find more sources):

  • The book Wikinomics by Don Tapscott is an intense introductory course on how collaboration is changing everything.

  • A McKinsey study Six ways to make Web 2.0 work by Michael Chui, Andy Miller, and Roger P. Roberts explains Web 1.0, Web 2.0, and covers some basic strategies to encourage participation in Web 2.0 solutions.

  • The article The Secrets of Marketing in a Web 2.0 World by Salvatore Parise , Patricia J. Guinan and Bruce D. Weinberg has rules of thumb for marketing departments, including the very scary words "Don't control, let it go."

Wednesday, February 18, 2009

SoundExchange reaches web royalty deal with NAB, but not webcasters

SoundExchange collects royalties under the US Government's compulsory licensing of music for radio stations. How much to charge for a web stream, and whether royalties for performance rights are included along with SoundExchange's traditional publisher royalties has been a point of contention for about a decade.

From what I can find in the press (which leave some questions unanswered), the National Association of Broadcasters (NAB, which represents terrestrial radio stations) has agreed to $1.50 per song per thousand online listeners, ramping up to $2.50 per thousand by 2015. (No news what stations pay for their airways broadcast listeners.) That deal is for radio stations that simulcast their programming over the Internet. It's also for any online-only programming those broadcasters might also provide. That $1.50 rate will more than eat up any online advertising the stations can sell, which typically sells for less than $1.50 CPM (thousand impressions) these days - and that's assuming they can sell a display ad for every song, not a single ad for every 3-5 (or more) songs typical of terrestrial audio ads inserted into broadcasts.

So it looks like the deal with pure online broadcasters got hung up on the question of programming interactivity and what appears to be an irrational insistence by SoundExchange on a percentage of a company's revenue, rather than a simple per-song fee. Some also blame RealNetworks for screwing up a deal reached in November 2008 by at least twice seeming to agree to terms, then pulling out at the last minute. (Sounds like Rob is being Rob again.)

US law grants an automatic license to play music as long as the broadcaster follows certain rules. The main rule is the music can't be played "on demand": a listener can't push a button and hear a specific song. Online services like Pandora skirt the on demand rule by allowing listeners to program their own stations by listing some artists they like. The listener is not guaranteed what song will be played, but it's likely something she or he wanted to hear. SoundExchange deems this outside the compulsory license law and wants extra money for that interactivity. They seem to forget that I can change my car radio from a country station to a rock station to a Latino station to an urban rap station whenever I want. Though I'm not selecting the music or affecting what an individual station plays, I'm still interacting with what I'm listening to.

True on-demand streaming services like Rhapsody, Napster, Zune, and others must negotiate separately with recoding owners (labels) to play music as US compulsory license law was not written for on-demand performances.

Friday, February 13, 2009

Microsoft reorgs Zune

This can't be good. Microsoft is splitting the Zune hardware team from the software and programming team.

The article also mentions Zune's device has merely cannibalized other non-iPod devices that used Microsoft's DRM under the "Plays for Sure" logo program. It's apparently made no dent in Apple's MP3 player market share.

I subscribe to Zune, but find their marketplace useless and their software client confusing. There's never anything I want to listen to on the main Zune page, and so far I haven't figured out any way to personalize it, or to automatically "recharge" my Zune with music I will like. Zune also infuriates me by showing me music in search results that they don't have. What's the point of that? To tease me, or to piss me off?

Google exits terrestrial radio advertising biz

Here is a lost opportunity. Google is getting out of the terrestrial radio audio advertising business. They say they will continue serving online audio ads.

The linked article mentions that total radio advertising has dropped. That seems to be a non-sequitur for Google, since they were starting from a 0% share of that market. Another article notes Google was mostly getting the low value remnant ad market.

Google was smart to try to expand their advertising empire offline. The number of people in real life dwarfs the number on the Internet.

I really thought that their democratization of advertising would lower the barrier to entry for radio advertising. However, audio ads are definitely more difficult to create than simply typing a few lines of text for an AdWords campaign.

Hopefully their online audio advertising can eventually help independent programmers make the Internet radio model work. I won't be surprised to see Google back in offline advertising in the future.

Wednesday, February 11, 2009

Total Music Shuts Down, Taking Ruckus With It

I'm building up quite a backlog of things to write about! Here's news that Univesal and SonyBMG's Total Music and its college music download service Ruckus have given up.

Matt Rosoff notes that not even free can compete with free:

Here's Total Music's VP of Product Management practically begging for a standardized set of platform APIs for accessing music legally:

Monday, February 9, 2009

Merchandizing and Recurring Revenue Online

Place-holder for a note I want to write about online merchandising and subscriptions - even for offline products.