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Vin Crosbie Vin Crosbie
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Dorian Benkoil Dorian Benkoil
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Bob Cauthorn Bob Cauthorn
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Ben Compaine Ben Compaine
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Dorian Benkoil senior consultant at Teeming Media. An award-winning journalist and editor, he was a foreign correspondent for AP and Newsweek, and international and managing editor for ABCNews.com. At ABC News he moved to the business side, handling sales integration and business development, before joining Fairchild Publications as General Manager for their Internet division, becoming editorial director for mediabistro.com, then a consultant for Teeming Media in New York. He graduates this year with an MBA from Baruch's Zicklin school of business. Learn more about him at Benkoil.com or his blog - MediaFlect.com.

Robert Cauthorn is a journalist, former vice president of digital media at the San Francisco Chronicle, and was the third recipient of the Newspaper Association of America's prestigious Digital Pioneer Award. He launched one of the first five newspapers web sites in the world and is generally considered to have delivered the first profitable newspaper web site in 1995. Cauthorn has been in the middle of the transition from old media to new and is recognized as frank-talking critic when he believes newspapers stray for their mission. In mid-2004 he became the president of CityTools, LLC a new media startup based in San Francisco.

Ben Compaine has divided his career between the academic world and private business. He was a journalist when manual typewriters were considered state of the art, but also led the conversion of his college newspaper to cold type. He has started and managed weekly newspapers. His dissertation at Temple University in 1977 was about the changing technologies that were going to unsettle the landscape of the staid and low profit newspaper industry. Since then he has focused his research and consulting on examining the forces and trends at work in the information industries. Among his most well-known works (and the name of his blog) is "Who Owns the Media?".

Vin Crosbie has been called "the Practical Futurist" by Folio, the trade journal of the American magazine industry. Editor & Publisher magazine, the trade journal of the American newspaper industry, devoted the Overview chapter of executive research report Digital Delivery of News: A How-to Guide for Publishers to his work. His speech to the National Association of Broadcasters annual conference was one of 24 orations selected by a team of speech professors for publication in the reference book Representative American Speeches 2004-2005. He has keynoted the Seybold Publishing Strategies conference in 2000; co-chaired and co-moderated last year's annual Beyond the Printed Word the digital publishing conference in Vienna; and regularly speaks at most major online news media conferences. He is currently in residence as adjunct professor of visual and interactive communications and senior consultant on executive education in new media at Syracuse University's S.I. Newhouse School of Public Communications, and meanwhile is managing partner of the media consulting firm of Digital Deliverance LLC in Greenwich, Connecticut.
About this blog
Two forces have shattered the news media. Technology is the first. Although media technology is undergoing its greatest change since the day in 1440 when Johannes Gutenberg first inked type, for more than ten years now the news industry has mistaken new technologies merely as electronic ways to distribute otherwise printed or analog products. Estrangement is the second. The news media has lost touch with people's needs and interests during the past 30 years, as demonstrated by rapidly declining readerships of newspapers and audiences of broadcast news. How we rebuild news media appropriate to the 21st Century from the growing rubble of this industry is the subject of this group weblog.

Rebuilding Media

Monthly Archives

July 25, 2006

Media Idolatry

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Posted by Vin Crosbie

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Batu Caves Shrines, Selangor, Malaysia, 18 July 2006   – © Vin Crosbie

If the Internet distributes information more efficiently and eliminates the middlemen, then why do so many owners and operators of traditional media — who are the middlemen — believe that they will make as much, if not more, money as the Internet becomes the primary means for distributing information?

That belief doesn't make sense.

Earlier this year at a conference in Paris, I pointed out to the newspaper industry that it is earning between one-twentieth and one-hundredth as much per website user as print reader. In April, Scott Karp independently analyzed further why media companies shouldn't make as much online as in their legacy modes.

His post made me wondering if there are historical precedents. When the Industrial Revolution began, did purveyors of cloth, coal, iron, lumber, and other goods that industrialization would revolutionize, believe that they too could maintain their previous profit margins? The answer is yes, those purveyors believed that industrialization would just markedly decrease their costs of production, enlarging their profit margins. But as the Austro-American guru of management Peter Drucker (1909-2005) noted, "Not only did the cost of production markedly decline, but so did the value people were willing to pay for the products."

The value people were willing to pay for those products declined. And that was when those products had been scarce. We today live an era when we're already awash in information. It's surplus, not scarce.

So, why do owners and opperators of traditional media companies believe that they will make as much, if not more, money as they switch to the Internet rather than using paper or radio or television as their primary means for distributing information? Wishful thinking. Belief. Faith.

But belief isn't business; it's religion. Root business concepts in reality, not in belief or faith. During Web 1.0, too many executives rooted their business plans in belief or faith. Unfortunately, the false idol they worshiped then turned out to be the Pets.com sock-puppet.

Today is scarily similar. I'm seeing too many Internet trade journal stories about how this or that 'business trend' is underway because thousands of executives hope to do this or that. Poppycock! Instead, show me thousands of executives who are successfully doing this or that. Hope is wonderful thing (and also the name of a girl I used to go out), but business plans shouldn't be rooted in hope. (Perhaps I too should have stayed with Prudence in 1976 rather than leaving her for Hope, but Prudence is a story for another day.)

Unless you publish or broadcast religious content, hope, faith, and belief don't have any place in media business plans. Including plans from startups, too.

So, if you're the owner or operator of a media who believes that you will make as much, if not more, money online as you did in print or radio or television, get your head out of the clouds. That's not heaven you've been glimpsing. It's aerial fog.

No, the world isn't hopeless. Yes, you can make much more online than you're making online now, just not what you were making when you're business was based upon scarcity and Industrial Era technologies such as printing presses and transmitters. Your world is changing. Or as Ad Age's Simon Dumenco earlier this year wrote about the magazine industry's perchant for traveling in limousines, We're Sorry Ms. Wintour, but You'll Have to Walk. And please use a map, don't just hope or believe that you know where you're going.

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July 21, 2006

Chilly Media Climate in Russia, But Some Issues for Media Business are Universal

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Posted by Ben Compaine

Though a bit removed from the main focus of Rebuilding Media, my completion of a project that required reviewing the media landscape in Russia the past three months coincided with last weekend’s G-8 summit there. Having spent more than five weeks on the ground, meeting with Russian publishers, attending conferences and seeing the media up close (with the aid of Marina, my tireless interpreter) has been most eye opening.

First, the big picture. Reports we hear in the Western media about the increasing amount of government control over the media are not exaggerated, though not always in context. Government ownership of Rossia, NTV TV, Center, and Channel One, the last the most watched network, is anathema to our First Amendment. Western Europe has a long tradition of government control of broadcasting networks—think BBC. But the role there has been out front and has been imbued with a public service expectation. In Russia, Channel One looks like any other commercial station. While its ownership by the government is not hidden, its obscured by its programming and “brand identification..”

A leading newspaper publishing group is owned by Gazprom, the mammoth energy company that is government owned.
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Most disconcerting were the stories I heard from more than one source-- some of them with inside knowledge—that the Putin administration calls the top editors of the leading media to the Kremlin for regular meetings. There they are told what the governments top interests and agenda is for the next week or two. No threats, but there is an expectation that the editors will be sure to promote that agenda, and positively. If not? They know that the tax police, the customs officials, the license grantors and so on can make life difficult for those who do not cooperate.

The result? A study earlier this year by the Moscow-based Center for Journalism in Extreme Situations found that “The main nationwide television channels devote about 90 percent of their news coverage to President Vladimir Putin, the Cabinet and the main pro-Kremlin United Russia party, portraying them almost exclusively in a positive light.”

On the other hand, the situation is far removed from the tight control of Soviet times, though in those days everyone knew that the media were tools of government propaganda. Today it is less obvious. Still, book publishing is free and robust, with 90,000 book and brochure titles of all sorts published yearly. Magazines, though as elsewhere mostly non political, have seen little, in any, interference. And, unlike China, the Web is unfettered.

Indeed, the Internet, though still behind in penetration compared to the US and Western Europe, is developing quickly, particularly in the major urban areas. (Russia’s territory is the largest on earth, but 10% of the population lives in Moscow and St. Petersburg, with 11 other cities of over 1 million population). Internet is in 80% of PC households and broadband, primarily DSL, is widespread. There are an estimated 22 million Internet users in Russia (out of 142 million total population). The sophistication of Web sites is three or four years behind the US in terms of video, audio and design. but if you signed on to Rambler, the Yahoo! of Russia, you would certainly recognize it as a busy portal.

Newspapers are suffering there as much as here, mostly because TV has just come alive in the past 15 years. Media advertising was about $5 billion there last year (vs. about $250 here), so the industry is really challenged.

There is intense competition among daily newspapers, with about a dozen serving Moscow and additional competition in the regions. This includes business and sports dailies and others that focus on traditional yellow journalism. As a generalization, they are mediocre at best. izvestia.jpgThey are thin, with bland graphics and hold to a level of journalistism standards that would be unacceptable by most Western standards. (Television news is worse). There are no thick weekend editions—too many people head off to their dachas (often just shacks on a small plot of land an hour or so out of town). Part of the problem is that advertising in the media is still minuscule, though growing fast. In 2005 advertising expenditures in Russia were about $5.5 billion, up from $800 million in 2000 and expected to double by 2010. By contrast, advertising expenditures in the US last year exceeded $250 billion.

One problem faced by the print media is the underdeveloped state of logistics in Russia. Long distances, snowy winters and lack of well developed wholesalers and distributors make it difficult to get a new magazine out to the newsstands. The number of newsstands—often controlled by the city governments-- is limited. There are no coin boxes on the corners. There are no reliable local delivery services such as UPS that online merchants can rely on for delivery of books or other merchandise. There is for the most part only the Postal Service, which is not viewed as fast or reliable.

The bottom line is mixed for media in Russia. On the one hand, they are facing the same types of questions faced by media players here and elsewhere—how to make an orderly transition to digital media environment, what to preserve in  analog and for how long. At the same time they are struggling with finding a Russian model for the press.

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