kucomm oct24

The Business Of the News Business: 

The Business Of the News Business It’s Changing Right Before Your Eyes James K. Gentry, Ph.D. Professor School of Journalism University of Kansas jgentry@ku.edu

A Presentation For KU Communicators: 

A Presentation For KU Communicators Original presentation developed for SPJ national convention and regional meetings Developed by: James K. Gentry Lisa Loewen Oct. 24, 2006

Impetus for Change: 

Impetus for Change Internet is redistributing power from news producers to consumers Old model: Big media companies delivered a “lecture” New model: New technology lets anyone become a “journalist” or “communicator” at little cost Fragmenting audiences

Impetus for Change: 

Impetus for Change Traditional differences between local and long-distance phone services, cable TV, satellite TV, radio and television are being wiped away. Present economic models in question Audiences want “experiences” Rate of change is escalating

Business Reality: 

Business Reality In 2005, traditional TV, newspaper, radio, magazine and cable revenue rose 4.2% over 2004 In 2005, Internet revenue was around $10 billion, up 13% to 23% over 2004 Advertisers shifting more ad dollars to the web and at a faster rate Nielsen Monitor-Plus, TNS Media Intelligence

Media Trends: 

Media Trends More outlets covering fewer stories Big-city metro papers threatened Battle of idealists and accountants is over Technological innovation Challengers to old media, the aggregators, are also playing with limited time Old media challenge Internet providers and aggregators to compensate them for content The State of the News Media Annual Report

Newspapers: The Details: 

Newspapers: The Details Newspaper revenue rose 1%-2% in ’05 Online revenues rose 30% + in ‘05; exceeded $3 billion in 3rd quarter ‘05 Circulation declined Advertising revenue up, linage down Stock prices fell by an average of 20% The State of the News Media Annual Report

Daily Newspaper Reading: 

Daily Newspaper Reading 18-24 years 25-34 years 35-44 years 45-54 years 55-64 years 65+ years 1967 2003 71% 40% 73% 41% 81% 50% 79% 59% 78% 64% 72% 70%

Circulation and Population: 

Circulation and Population In 1980, daily newspaper circulation was 62.2 million. In 1980, U.S. population was 237 million In 2005, daily newspaper circulation was 54.6 In 2005, U.S. population was 296 million Newspaper Association of America

Newspapers Losing Jobs: 

Newspapers Losing Jobs Business has lost 3,500 - 3,800 newsroom professionals since high of 2000 (not counting 2006 losses) Estimated loss of 1,250-1,500 in ’05 Estimated loss of 500 in ’04 The State of the News Media Annual Report

Broadcast: The Details: 

Broadcast: The Details Network morning news revenues up 15% in 2004; projected up 6% in ’05 Network evening news projected a 10% increase for ’05; in ’04, only ABC had revenue growth. Biggest change in ’05 was the shift from showing a profit to breaking even at many stations. The State of the News Media Annual Report

NBC Universal Reality Check: 

NBC Universal Reality Check NBCU to reduce spending on traditional TV by up to $750 million as viewers and advertisers move to new media Planning layoffs across news departments, including CNBC, MSNBC Replacing dramas, comedies with low-cost programming in 7 p.m. time slot Creating regional “hub” in L.A. to serve NBC, MSNBC, CNBC and three area stations

Strategies: 

Strategies Clustering Outsourcing: Sweetheart, get me India Consolidation Brand extension “Convergence” Develop new revenue streams

Clustering: 

Clustering Buy properties in the same region to gain operating efficiencies MediaNews: Has 33 California papers. Adds Contra Costa and San Jose McClatchy: Had 1 N. Carolina paper, 3 S. Carolina papers. Adds 1 N. Carolina paper, 2 S. Carolina papers from KR

Outsourcing: 

Outsourcing Reuters: 1,000 journalists in India in ‘05 Has 15,000 employees in 91 countries Mid-late 2006, Reuters hoped to have half of its staff located in India Business 2.0 outsourced entire section of magazine to India in 2004 “Creeping outsourcing”

Consolidation: 

Consolidation Rupert Murdoch and News Corp. Television Satellite Newspaper Technology, multimedia: MySpace ‘05 Disney, Viacom, GE McClatchy & Knight Ridder, MediaNews

Brand Extension: 

Brand Extension ESPN ESPN2 ESPNews ESPNClassic ESPN.com ESPNRadio ESPNU ESPNZone ESPN the Magazine ESPYs

“Convergence”: 

“Convergence” Tampa Lawrence Tribune Company Naples, Bonita

New Revenue Streams: 

New Revenue Streams Build website for other companies Lawrence Journal-World Find sponsors for specific sites MySpace Package sales with other media Charge for niche advertising Google

New Revenue Streams : 

New Revenue Streams News Corp has developed a national classified database Consumers can customize ads in Newspaper Website Cell phones Podcasts Or any combination of the above

What’s Enough Profit?: 

What’s Enough Profit? Knight Ridder and Gannett 16% McClatchy 14% Disney 8% Wal-Mart 4% Exxon Mobil 10% Anheuser Busch 12% Yahoo 38%

KR Cost Cutting: 

KR Cost Cutting Eliminate duplication of key national beats and art criticism Cut home delivery discounts and NIE Replace defined benefit plans with defined contribution plans Consolidate national and retail advertising accounts

More Cost Cutting: 

More Cost Cutting Regional news center Consolidate all copy editing, wire editing, page design and layout into three regional centers serving 31 K-R daily papers using common front-end technology Centrally manage technology, finance Centralize classified calls

Blogs: 

Blogs Instant interactivity, fastest growing segment of the web. A new blog is created almost every second Perhaps 30 million blogs Search engines track information found only in blogs Technorati Ice Rocket Google Blog Search

Blog Searching: 

Blog Searching Search engines that track information found only in blogs. Technorati Tracks over 31.2 million blogs Returns more total results Ice Rocket Search by keyword and author Google Blog Search The fastest search engine

Best Blogging Newspapers : 

Best Blogging Newspapers Houston Chronicle Washington Post USA Today St. Petersburg Times Atlanta-Journal Constitution San Antonio Express-News New Orleans Times-Picayune The Oklahoman NYU School of Journalism

What Makes a Good Blog?: 

What Makes a Good Blog? Ease-of-use Clear navigation Currency Quality of writing, thinking and linking Voice Comments and reader participation Range and originality Explain what blogging is on the blogs page Show commitment NYU School of Journalism

iPod Explosion: 

iPod Explosion iPod sales increased by 909% from 2nd Q ‘03 to 2nd Q ‘04 807,000 iPods sold in 2nd Q ‘04 100 iPods sold per minute in 4th Q ‘05 31 million iPod units in use in 2005 43 million iPods units predicted in 2006 Now video What I want, when I want, where I want

News Media Podcasting: 

News Media Podcasting NPR More than 6 million downloads monthly Sponsored by Acura, HBO, Intel and Vanguard New York Times Naples Radio stations purchase newspaper podcasts for their “news” shows

News Drives Web Traffic: 

News Drives Web Traffic When a major news event occurs, number of people visiting sites soars BBC News accounted for 27% of news impressions on day of London bombings Websites had a 30% increase in activity on the day of the London bombing More than 60% of users go online to get news and information

Change Leaders: 

Change Leaders New Orleans Times-Picayune Hurricane Katrina www.nola.com Nola changes culture of Times-Picayune Greensboro News & Record Virtual town square where every reader is a reporter New value: collaboration with citizens Bakersfield Free classified Website called Bakotopia Northwest Voice, a free paper Mas, weekly targeting English-speaking Hispanics

Citizen Journalists: 

Citizen Journalists Ordinary members of the public turn into photographers and reporters People getting used to creating pictures and videos on their phones, and increasingly think of sharing them People want to share their stories

Techniques They Use: 

Techniques They Use Camera phones Personal dispatches Blogs Podcasts Wikis Instant messaging, chat, etc. RSS (really simple syndication)

Citizen Involvement: Opportunity or Threat?: 

Citizen Involvement: Opportunity or Threat? “Best opportunity in decades to do even better journalism” by enthusiastically embracing connectivity – Dan Gillmor Traditionalists concerned with accuracy and credibility: hoaxes, fakery and downright errors or deceit.

Citizen Journalism: 

Citizen Journalism Norfolk HamptonRoads.tv Video-only Website Wisconsin State Journal Readers pick one story to appear on front page Inciteful: editor’s blog that explains news decisions Nashville Local ABC affiliate WKRN Entire staff can shoot stories More naturalistic programming

Citizen Journalism: Al Gore: 

Citizen Journalism: Al Gore Current TV: Do it yourself TV Al Gore’s start-up Goes beyond news and into lifestyle Uses website to gather feedback on what should air Pays for videos it chooses to run

Forums, Forums, Forums: 

Forums, Forums, Forums News Sports Survivor stories Mayoral issues Pet rescue “This forum is provided for users to share news and information about animal and pet issues that may help other animal and pet lovers in the Metro New Orleans area.”

Readership Institute : 

Readership Institute www.readership.org/ Users have “experiences” with your media offering, no matter what you do Experiences are linked to audience’s behavior using your media Experiences can be changed, enhanced Improve the “experience” Break formula, take risks, be notably innovative

What is “Experience”?: 

What is “Experience”? How your offering makes consumer feel How it interacts with consumer needs, interests and desires Thoughts and feelings consumers have with your publication or broadcast or site and with its relevance to their lives Breakthrough: When experiences correlate by target group to motivating or inhibiting media usage

Learning from Star-Tribune: 

Learning from Star-Tribune Tested Readership Institute findings Over-arching readership goals and strategy Everyone measured against them From RI “experiences” research: Something to talk about Looks out for my civic and personal interests Surprise and humor Ad usefulness

Slide42: 

Original Paper Feb. 22 Typical news day Front and inside page

Slide43: 

Improved Paper Same day, same news choices Trying for experiences

Slide44: 

Experience Paper Same day, but news chosen from any part of paper or news budget

Experience PaperStrongly Preferred: 

Experience Paper Strongly Preferred Percent who prefer Side by side comparison

What is Rob Curley Up To?: 

What is Rob Curley Up To? Just who is Rob Curley? Vice President, product development, Washingtonpost.Newsweek Interactive His team developed the national or international newspaper Web site of the year (named by either the Newspaper Association of America or Editor & Publisher magazine) every year 1998-2004. In 2001, NAA named him the newspaper Internet Pioneer of the Year, the youngest person to ever win the award.

Rob’s Advice: October ‘06: 

Rob’s Advice: October ‘06 Own local breaking news Hyper-local content Database-driven coverage Multimedia overkill, video mania Evergreen content Embrace platform-independent delivery Dialog, not monolog

Naples & Bonita News: 

Naples & Bonita News Relentlessly interactive Lots of community contributions Reporter and reader photos, videos Reporter and reader blogs Lots of audio Reader forums

And More: 

And More Newsroom Podcast Email news, sports, weather to your phone Access police scanners Listen to audio traffic from Naples Municipal Airport Email newsletters Stories downloaded to PSP Started videocast from newsroom that runs online and on local cable

Hyper-local in Marco Sun: 

Hyper-local in Marco Sun Mega-calendar including: Rotary meetings and Bible studies Church guide Restaurant guide Beach guide Schools guide Marco Island history Fishing blogs

Challengers: 

Challengers Craigslist OhmyNews Skype and eBay

Others: 

Others Backfence.com, in suburban Virginia. Citizens are the only contributors and the “newspaper” is an unedited Web site. Blufftontoday.com, Bluffton, S.C. Made up largely of reader contributions. Also free tabloid. Loudon Forward, Loudon County, VA

And More: 

And More Generation @ Vlogging Videocasts Video on handhelds On-demand media

Social Networks: 

Social Networks Participants act as producers, distributors and marketers of content through reviews, voting and blogs Today’s audience wants more interaction Today’s audience wants the ability to create and distribute its own content Today’s audience wants a personalized media experience Yes, experience

Social Networks: 

Social Networks MySpace.com (Murdoch) Facebook.com (Yahoo?) YouTube.com (Google) Buzz-Oven.com Vidilife.com

MySpace: 

MySpace 79.6 million unique visitors in August More than 40 million registered users Received 21% of visits to U.S. online video sites in September Users may post messages, update blogs, send photos via mobile phones Google paid $900 million to provide search services and advertising on it News Corp. purchased it for $580 million

Facebook : 

Facebook 15.5 million unique visitors in August Connects college students with similar interests and activities Includes 1500 college campuses Launched a high-school version Ads may be targeted to students at a specific college Talking with Yahoo about $1 billion purchase

YouTube: 

YouTube Purchased by Google for $1.65 billion Received 46% of visits to U.S. online video sites in September Users watch short videos more than 70 million times a day Users post 60 million videos daily, for free Mainstream shows from current season, clips from TV’s earliest days, and homemade movies from around the world Can submit video from mobile phones

Buzz-Oven: 

Buzz-Oven Social Network for teens in Dallas Started as a way to market local concerts Evolved into a full social network Sponsored by Coca Cola Operates independently and as a subsite on MySpace.com Links to the Dallas Observer

Vidilife: 

Vidilife A Social Network that uses online videos to attract net surfers New technology allows anyone with a computer to put video online Launched in September, attracted 220,000 unique users in October

Google: 800-Pound Gorilla: 

Google: 800-Pound Gorilla Google will be first search company to gain one-quarter of the total money spent on online advertising ($4 billion) in 2006 YouTube purchase means more ad dollars GoogleMail growing in popularity Leaving Yahoo in its dust

Gaming Industry: 

Gaming Industry More than 300 million people play worldwide Handheld gaming hardware sales grew 96% from 2003-04 $34 billion in revenues in ‘05 Compared with $21.4 billion movie box office receipts

Gaming and News?: 

Gaming and News? PSPcasting RSS and PSP Video 9 software Convert regular PC video files into PSP files ABC News signed as PSP’s first news provider News Corp. paid $650 million for game-site operator IGN Entertainment Viacom to acquire Xfire Inc. for $102 million Adding 300,000 gamers per month

Professional Electronic Gaming: 

Professional Electronic Gaming Global Gaming League World Cyber Games Cyberathlete Professional League First tournament held in 1997 TSN will webcast 25 tournaments in 2006 CPL finalists will compete for $500,000

Gaming and Advertising: 

Gaming and Advertising Microsoft to acquire Massive Inc., a start-up company that places ads in videogames Clients include Coca-Cola Co., and Honda Video games could become new medium for advertising Companies pay to insert brands on billboards, posters, soda cans and other on-screen elements within video games.

Key Factors: New World: 

Key Factors: New World What I want; when I want; where I want Today’s economic models in question Big media will remain but portfolios will be different Citizen produced/open-source content Video conferencing ubiquitous Help people make the most of their time: TIVO, PDAs, cell phones

By 2010: 

By 2010 e-ink Consumer control: Podcasting, RSS, eBay, consumer created media Digital across platforms, almost ubiquitous Talk free with paid services Video conferencing changes communications Media moving to other news & information channels: Super search, hyper-local, B2B Other?

Challenges for Media: 

Challenges for Media Offer decent pay Opportunity to be creative Appreciate staff ideas Ramp up the pace of change Engage young audience: as workers and media consumers!!!

And in the Workplace : 

And in the Workplace What young workers want Ability to make a difference Meaningful work Opportunity to learn new skills Mentoring Flexibility Decent paycheck

What’s It Mean?: 

What’s It Mean? To “win,” traditional media can’t nibble at innovation Recent changes and those to come are potentially lethal for legacy media Some will embrace new ideas and use media to their advantage Many will talk change but stay unchanged Can the business change? To be a strategic winner, you can’t stand still Readership Institute

Sources: 

Sources www.stateofthemedia.org www.readership.org www.people-press.org www.pewcenter.org www.mediacenter.org www.poynter.org www.morningstar.com Newspaper Association of America Radio Advertising Bureau Magazine Publishers of America Television Bureau of Advertising Cable Television Advertising Bureau Business Week The Wall Street Journal The New York Times Fortune