See, this is why the Seattle Times is slowly going out of business:
As an industry, we are in hard times. […] Like radio, it appears that Internet-delivered news has to be supported entirely by advertising.
We offer such ads, and every quarter we sell more of them. And yet we see the pot of gold in Internet advertising going to one company: Google. […] We look at Google, and ask: What do you offer? A shelf on which to stack our product. It is an instantaneous and custom-made shelf. It is useful, and we use it every day. But still, it holds our product.
[…] Copyright law everywhere is a balancing act. It is a system of rules to make sure that writers, photographers, musicians and other creators are paid. If, because technology changes, the law gives too much power to the owner of the shelf and not enough to those who create the products on it, the law can be adjusted.
Um… could they be more clueless? Rather than trying to adapt to the new media paradigm, they want to hide from it. What’s next, suing bloggers to prevent us from blockquoting and linking? And after that, why not just sue your own customers? (Just look how well that’s worked out for the recording industry.)
Hell, if the Times doesn’t want its slot on Google News, I’ll take it; it would likely double my traffic, and with it, my revenue from Google AdSense. See, Google doesn’t steal audience from newspaper websites, it drives traffic toward them, and if the Times can’t figure out how to monetize their traffic, well that’s their problem. No wait… it’s my problem too, because part of the reason none of us are making enough money is because the goddamn newspaper industry spent the better part of a decade trash-talking online ads in a futile effort to defend their lucrative print ad business.
So quit whining about Google, Frank, and start figuring out how to get a decent price for your valuable online inventory. We’re all counting on you.
Good work Goldy!
The MSM are not victims…unless you call them victims of their own stupidity & stubbornness.
Pride & Ego are at the core of most failures.
This is a perfect example.
The advertising agencies, and TV, radio, and print media, have for decades concentrated on “image advertising” – spending untold millions of dollars in creating ads designed to do nothing more than make people “feel good” about your product or business. While some such advertising is demonstrably successful (example: “Marlboro Man”), the great, great, majority of it is nearly impossible to measure in terms of success. The advertising agencies argue that it is successfull and since your competitor is doing it, you have to pay millions also to do the same thing. Even if your campaign is belived to be successful, they want you to change it (“it’s going stale….” because they (the advertising agency) can make more money, and ad execs can individually be more successful in the ad world, only if they create new campaigns.
That’s why people who really depend upon advertising, direct marketing, eschew such “image advertising”. They create dozens of test ads which have a specific phone number or mail box to which the customer responds, and they can count which ones actually create sales. Then they narrow it down, casting off the relatively unsuccessful ones, and proceed with the ones which are most successfull.
The thing about the internet is that there are lots of ways you can directly measure success of your advertising campaigns. Any web hosting program worth it’s salt will let you see where your traffic is coming from – various search engines (including Google, Yahoo, MSN, AOL, etc.), pay-per-click advertising (Google Adwords), and even down to the key words, static links, and websights which originated the links. A good webmaster is keeping track of conversion rates, and 2.5% to 5% conversion rates (clicks resulting in sales) is considered to be acceptable.
And everyone knows that lots of traffic to a website is good, and more traffic is better. In the early days there were cost restrictions on bandwith used, but now there is virtually no additional cost to serve the increased traffic.
So now a business has lots of advertising options. Using the internet, the cost of advertising is low, they can directly track how successful the ad is in increasing their business, and they know the source of their web traffic. But using print media, they only know how many people paid for a subscription – not whether they opened the paper at all, or whether they opened the page containing their ad, or whether they actually read the ad and acted upon it.
Newspapers run by old dinosaurs around the country have, from time to time, objected to having an internet version of their paper because they didn’t want to give away for free the content for which they used to receive a fee. Some have reacted by having their website available only to subscribers of their paper, or requiring a fee to access more than the first paragraph of an article, etc. But the Times, I’m sure, is well aware that none of those business models have NOT worked. People just go elsewhere on the internet to get their news.
Besides, if you check more than several newssources on the internet daily, you will see that a large percentage of it isn’t original reporting, just wire service copy, reprinted in hundreds of publications virtually word-for-word.
But in a larger sense, the Times is trying to protect not only their subscription base, and their content, but also to maintain their almost monopoly power in the city. They object to Google providing the “shelf” because they want to be the only store with shelves in town. (Sure, the P.I. is still around, but that’s another subject). Running a newspaper is an expensive business – modern printing presses are expensive, as is the distribution network for circulating the product daily. That provides a high barrier against entry by competitors, and that is why there are so few two-newspaper towns left in the U.S. With that high entry barrier in place, the newspaper becomes not only the owner of the “shelf”, but the ONLY STORE IN TOWN. If you want to advertise in print media, you have to go to the newspaper, and pay whatever rates they charge.
But it’s not just cost. As the only store in town, the newspaper is free to decide whether or not to run your ad, where to place it on the page, and at what cost. A potential competitor to their business interests (or those of their friends) might well find it impossible to advertise via newpaper. Likewise, the editorial pages become the “kingmakers”, annoiting candidates with their endorsements, with few other sources to say otherwise.
It is this type of power which the Times want’s to preserve. But they might as well be fighting against the tide.
But don’t think they will not go down without a fight. The Time’s editorial indicates that it, as well as other newspaper publishers, may try to change copyright law. I think it’s stupid, but if they think it’s in their interest, it won’t be the first time they have done stupid things.
You may see other attempts at legislative action – perhaps an attack on Craigs List, making them financially responsible for any illegal conduct which is facilitated through their service (which could arguably shut down the prime competition to newspaper classified advertising). We’ve already seen some “outraged” editorials in print and TV to that effect.
What I’m most worried about is the pronouncements, from time to time, that “The internet is broken”, and needs to be fixed. Proponants have argued that viruses, and identity theft, and the spread of pornography and child abuse have made the internet an “unsafe highway”, and that it needs to be scrapped and replaced. They are pretty hazy on the details, but it appears to be that they want to put the internet into the hands of a private company which will screen all traffic, including approval of web domains and publication, sifting through e-mails and data transfers for viruses, etc. Of course, such a service wouldn’t be free – and web publishers such as the Seattle Times might pay a significant fee to be available online, at a price which would keep web bloggers, small businesses, and any potential competitors off the internet. In other words, re-creating the high entry cost, and at the same time allowing for censorship of content by a private company. It wouldn’t surprise me if Murdoch wouldn’t be a big bidder for such a contract.
Which is one more reason to keep the Republicans out of office as of this November’s elections, because this is just the type of “change” they would embrace.
In other words, the Republican theory of a “free market” – you don’t have to win in the free marketplace as long as you (a) have enough money to put everyone else out of business, (b) can get the government to outlaw your competition, (c) get the government to subsidize your business (tax breaks & price floors), (d) get the government to cooperate in keeping your costs low (counting “tips” toward the minimum wage requirement), and (e) getting the government to give you the business outright, without having to compete for it fairly (no-bid contracts, or bid requirements rigged in your favor).
If the Blethens want to stay in the newspaper business for another couple of generations they should sell the Seattle Times, take the proceeds, whatever piddling amount that might be, and move to Yakima. There they could use the proceeds to prop up the Herald Republic for a few decades until they have exhausted their capital.
@4
Generally unlikely. Rich folks don’t just piss their money away. If it looks like the Family Money is threatened with extinction, they’ll move on to something else.
It could be that the newspaper business is slowly dying, and that won’t be the end of the world. The music business used to be almost entirely the publication of sheet music. That died when Edison invented the gramophone. Maybe newspapers face the same fate. I’ll miss the crossword puzzles.
1 cyn
The story of the decline of Fox News.
@5 PI
I agree that it is unlikely, but then again Frank isn’t very smart and he has been doing a pretty good job of turning a large fortune into a small one the last few years.
Want to know how deep this all runs? Try writing a LTE to The Times critical of something Ryan Blethen writes.
First, you should be commended for getting all the way through something so unreadable, but don’t hold any hope for the publication of your letter – into the black hole it will go.
Frank Blethen seems pissed that he can no longer sell his product directly door-to-door. Now, the marketplace says it wants to get it, if at all, at a convenient central location – no more soggy papers gotten after slogging out in the rain in your PJs.
When I was a kid, milk, bread, doctor services, the mail, and other things were available for home delivery. Times change – the marketplace decided for any number of reasons that home delivery was no longer viable or efficient. Now I have to go to the store for milk and bread, the local branch of my doctor’s practice to have my torn muscles tended to, and either the central grouping of locked mailboxes down the block or the post office itself for my mail.
Nothing is static in life.
Blethen complains that the functional equivalent of a store, Google, is now where audiences will go first rather than have The Times site as their homepage.
The same rationale explains the success of Drudge, which is now the place to go first to check headlines then link to where the story is told.
In the music industry, artists are getting used to the new paradigm: learn to take less in order to control the rights to your music otherwise you’ll end up with nothing. Sales of CDs plummet, which tells you that the public thinks they were overpriced to begin with.
Times are tough all over, Frank…We all have to adjust or become extinct.
Oh…and rhp6033? It isn’t conservatives who’ve advocated some sort of “control” over speech content on the Internet. Big government and world government types are the ones who favor controls.
http://www.opinionjournal.com/extra/?id=110007381
Conservatives favor laissez faire.
The Piper
RHP6033, as well as Goldy…
RHP, you are dead on with so much of what you are saying. I don’t however, feel that this is some Republican Conspiracy as you’ve alluded.
There’s no doubt about it, the problem’s the editorial cites are in fact real problems for the print industry as a whole.
Let’s face it, the land of print industry has changed dramatically, it’s not the first time and it certainly won’t be the last.
In the late 80’s and early 90’s desktop publishing came into the scene and the effects were pretty severe. Ask yourself the last time you heard of someone working as a type setter?
Then the issue of on-demand printing hit the scene in the late 90’s and the film houses and traditional printers we carved down to nothing until all that’s left of those are a very few high end color houses and small printers that are being absorbed by larger conglomerates such as RR. Donnelly to name just one.
The situation we face today is a bit more severe and no-one knows what’s going to happen… Print publications, certainly newspapers fall into that definition, are facing a very serious threat of extinction.
I’m not saying competition is not good. The consumer ultimately is benefits, for now, as everyone in this industry is streamlining what and how they do things. Produce more with less seems to be the rallying cry.
Like so many other people out there, I have long ago cancelled my print newspaper as the internet provides e with free access.
If someone has a quality product, they should never have to worry about competition. However, these days, we face a whole new beast… The one thing that all of the print industry has in common is it employs highly trained individuals, and regardless of your swing on politics, you all benefit from their craft. Writers, editors, admins, drivers, printers, photographers, truck drivers as well as the supporting industries surrounding them such as paper manufacturers, ink, etc…. Everyone of these people are going to be affected when this cookie crumbles.
Mornus67 @ 9: Good catch on the desktop publishing angle – I had forgotten about that. There are a lot fewer smaller printers doing business cards, restaurant menus, letterhead, and flyers because of that.
Piper Scott @ 8: The home delivery is another aspect of the changing times. Home delivery really had it’s headay beginning in the 1920’s through the 1950’s. Why? Mothers stayed at home and didn’t have transportation to carry heavy goods from a store. If there was a car in the family, there was only one, and the husband in the household usually took it to commute to work. Home delivery began to die off with the advent of two-car families, and the death-knell was the two-income families. Now there simply isn’t anyone at home to take delivery. That’s also why most residential burglaries now take place in the daytime, rather than at night.
As for whether or not the Times wishfull thinking in having the government help it turn back the clock, you mentioned that wasn’t conservative philosophy. Well, it isn’t Democratic philosophy either. That’s one of the beefs I have with the Republican party – there is a large discrepency between their stated philosophy and what they do in practice. I think the “conservative” label has always been a misnomer, but especially when it is applied to today’s Republican party.
Now, if you want to talk about the party of Teddy Roosevelt and Barry Goldwater, that’s a different kettle of fish. At least they practiced what they preached.
I am not sure exactly which shelf matrix ol’ Frank is talking about, but it certainly seems to me that, when you use a link from Google news to a story on the Seattle Times site, you get more than your share of Seattle Times advertising content. Perhaps what is really tightening the anal sphincter, is that using Google, and its textual snippets, helps steer one away from crappy journalistic mush. When i can see eight different online sources of a particular story’s intro i definitely won’t choose the Times over other sources.
Spyder….
Thank You for writing this as it establishes the point better than I could have ever written.
When something is put in writing, be that print or online, a strange thing happens… Somehow that which is being said has a tone of authority. Some publications have a higher degree of respect, so when a blogger goes off on a tangent and then hyperlinks to a publications article, they are in fact trying to validate whatever off kilter point they are trying to make.
No offense Goldy.
When a print publication publishes something, be that online or on the web. They do so with a responsibility as well as the threat of liability if they get that the story wrong. In order to protect those interests there are a series of things that happen, fact checking (in your case, spell checking), proof reading, etc….
All of those functions take money to pay professionals.
These professional salaries are factored into the cost of print advertising as well as a subscription cost. Depending on what type of publication you have, circ revenues are your operating costs and ad revenues are profits. That does not apply for ever pub but it’s a good point of reference.
As RHP pointed out, print advertising is an intangible, so you’re never quite sure on the true effectiveness of the ad? Whereas online advertising is MUCH cheaper and incredibly trackable.
So…. many advertisers choose to go online and print ad revenues have become harder and harder sales for the publishing world. As the news has become so available online, circ numbers have dropped all over so publications are laying people off.
Meanwhile, bloggers continue to cite these news stories to validate their own points of view. As I wrote that sentence I was visualizing a vulture.
Unfortunately, it’s not a trade off. For the most part, bloggers are not businessmen nor are they journalists.
Take Goldy for example. If he is in fact true competition for the Seattle times as this blog post alleges (he is the new press and the old press is dying, therefore he is doing things right for the little man), why do you get the occasional cries for economic assistance for him and his cohorts on this site? After all, Goldy does have advertising on here? Therefore this site should in theory be self sufficient.
The trick is, it’s not.
Internet advertising and business models have not been defined as of yet. There are a number of factors behind that:
– First off, the click through charges that originated on banner ads have proven to be a complete mess unless.
– Print advertising often times throws web advertising in for free or as an incentive.
– The new version of banner tracking is based on traffic, but that’s not accurate either…. Let’s face it, if you took the top 5 contributors off of horsesass for 2 months, the numbers would see a HUGE drop. And when your banner ad is being billed at $20 per 1,000 hits…
Sorry if this is a bit rambling. It’s a pretty complex subject.
#10…..Hmmm. Home delivery might be viewed as another one-time fixture of society that’s been done in by the pre-eminence of the automobile. As it gets less and less practical for each and every one of us to jump into that 4,000 pound box and go scurrying off on a whim to fetch stuff, maybe that’s going to change. One guy driving around in a small truck dropping off groceries to a couple thousand households may work a little better than two thousand people wandering to the store in their cars.
As to getting the news, electronic media still has to beat the daylights out of hauling dead trees all over the place. Unless, of course, we screw things up so bad that all those connections break down in a post-industrial meltdown. Then maybe there’ll be gigs for town criers again.
Art @ 13: Okay, I’m having fun with the image of Goldy as a town crier….
Momus @12,
Asking for user support is as much a valid business model as subscription fees or advertising. It certainly seems to work for PBS and NPR.
And no, HA could not support itself on ad sales yet because it doesn’t have a large enough readership, and online ad rates are simply too low… and much lower than the value we offer in return. For example, for the month of May, I earned only about $0.38 per thousand impressions for my banner ad, when I should be making ten times that.
Industry-wide ad rates have to go up, and its the big players like the Times who need to do the heavy lifting to get there.
Goldy @15,
I agree, Rates do need to go up.
Let’s face it, your time should not be free, nor should any other professionals.
People need to start paying for the internet and I think that is what Blethen is supporting. Copywrite laws have been incredibly lax and the simple reality is, if you are going to be linking to someone else’s work to validate your own, you should be paying a fee.