Posts from — December 2008

The Nieman Journalism Lab found a very interesting internal document from The New York Times that can give us a very quick and complete idea on all issues ar0und their worries and work progress in business sustainability. (I would love to access that document monthly ).

I would firstly like to point out a sentence that is really significant of a view on media sustainability,  and it is just the fact to assume our two sided business:

The end result must be that we serve the high expectations of our customers, both readers and advertisers.

It is a simple but clear statement and reminds us who pays our salaries, that’s all.

The document reviews:

- How they did  capitalized american elections. This part is just an ABC on how they: sold more printed newspaper, increased their online audience, spread their social networking, and empowered their heavier users by an event.

- What is going on with top advertisers

- The New York Times Store will sell grow around 30% to 40% YoY based on: memorabilia, fine arts, and also Obama merchandise. It is very helpful to understand their focus in The NYT Store by having a look to their spot: ( you can get the file here)

It is unusual to find internal documents on business execution in media companies and that is the reason why it is interesting.

Pic by M. Keefe

A personal view on the future of social networks:

Social networks are not tools we use to communicate online with other people, but people connected around nodes. Then, facebook, tuenti, or linkedin are not social networks themselves but social networks enablers.

These enablers face big challenges:

1. When they are born, they need to open up in order to acquire new users and contents and to lower entry barriers to newbies.
2. Once they are big, they have the threat of being to opened. Users are the owners of their information and they may leave the platform or sindicate the content from another platform. Then, it would be necessary to lock-in users by closing the platform
3. opensocial and openid would convert platform into commodities that, in fact, do not add value further from hosting contents

Social networking platforms, in my opinion, are over-valued and their future sustainability is of a great difficulty and wild competition with lowering entry barriers to social sindication.

At the end of the day, they are also content business (although user-generated) and they face the challenges any other online media faces. Their content may be moved out and their network economies may not be enough to stop the development of neutral and external applications. The B plan would be closing their platforms, but that would get into a kind of autarchy of proprietary software in a growing opened software world.
Content aggregation tools (tools, no the social networks themselves) have, in my view, a clear path to become commodities and to face much more legal problems than business opportunities. There will be (probably) many business based on social networking, but, it may be the case that this business is not made by platforms themselves, or, at least, not by their platform development business unit if they had any.

Again talking on New York Times.

Their extra, added today in beta, is just a great step forward to becoming an agreggation axis.  Combining the power of automatic and manual aggregation with an editorial line, from my point of view, is the future of Internet because we simply got too much information and the problem is not of volume but of quality information.
I am every day more convinced that New York Times is right in combining their brand with their future.
The key to contents online is not reading, watching, enjoying contents but searching. If media gets to the core of finding information, they will go back to being central in communications, and this is why this is not tactical but strategic.
This tool is just easy to use and it does not need installation. It offers a different navigation for a different user profile and if you prefer the traditional mode, you may just switch back to the “old” nytimes.com. This is offering more features to those who want more while keeping a “traditional experience” for those who prefer it.
I am really happy to see them clearly leading the way because I feel they are a mirror for many other media. Hopefully, they will speed all media so much and we should all be grateful to what they are doing.
When you are a brand like The New York Times, taking riks to innovate and progress is much more exposed to criticism. Great job again and hopefully they will continue offering ways to access not just “any” available content online, but any quality content. I think that difference  is huge because our time is gold and we got no time to waste so much in finding and selecting sources all the time on our own.
I think today is going to be a new beginning. I know many people may think I am over-reacting to this, but I think this tool just confirmed what I think about The New York Times, they know what they are doing and they are being brave to innovate.
If you also think that aggregation tools used by humans can be key for the future of communication, then go to reading this post:  new journalists for new information flows

It is widely maintained around techonology blogs and analysts that traditional media companies are not aware of our changin landscape. I personally believe that the complex nature of media companies makes it uneasy to lead the changing world, but top executives in some media business know what they are doing.

Having a look to a PPT of New York Times in Bear Stearns 21st Annual Media Conference (March, 2008) is helpful to see a media company situation nowadays. It states 3 challenges.

1. Protecting the brand and maintaining journalistic excellence are paramount

2. Capitalizing on opportunities in print while improving productivity and improving our cost structure

3. Growing our Internet businesses organically while making smart acquisitions

In other words: we want to continue being a reference brand in terms of quality (differenatiation), we have a cow that is decreasing and that is why we got to reduce structural costs, we have Internet to grow both: organically and through acquisitions. So, we got: brand + current cash generation (print) + future cash generation (online).

It is nice to see such a clear statement and assumption of reality. The document as a whole goes around those statements. It is a transitional strategy, a change management problem:

The document quickly focuses in online development. And, concretely, they more concentrate in analysis and business development than in content production. I believe this is a very realistic approach that is completely different to the one taken by some “native” companies that first try to concentrate in product development and content production and then try to work how to monetize it (mobuzz, or lycos may be example of the later, and even some business units in Google). In fact, most failures in Internet are happening in new ventures of pure players, we rarely saw a “traditional” media failing in their Internet operations. There is a pragmatic view coming from offline that is going to change the way to develop business online.

That is business sustainability, caring on how will we monetize our service. 500 MM $ investment in a clear direction: reinvigorate growth within Digital businesses. But also, selling businesses in TV, radio and print (worth 700 MM $). So… aren’t they going in the right direction?

I see them betting hard, and I think they are already transforming their business. For sure, they are going to be a winner also with new technologies.

We may well critizise “traditional” media when they are slow movers, but we have to recognize that this is not always the case.