A virtual new-media interview

So I just finished my first live chat (for the American Society of Newspaper Editors, on the topic of new business models), and one thing I learned is that before a live chat, you're suppose to prepare some canned copy that you can paste in, so the guests don't sit there waiting while you type.

And since I was invited to this chat by the great Steve Buttry, he sent me a list of possible questions in an email earlier this week. I thought they were damn fine questions, too, and since I've already answered them in preparation for the chat (which only got around to a fraction of this material), I figured I'd reconstruct it here, as an interview, for as much of an audience as cares about it.

Joining hypothetical chat... -->

DC: Hi, I'm Dan Conover. I spent about 20 years in the newspaper business (reporter, city editor, web guy, cartoonist, videographer) before taking a buyout in 2008, and I've written quite a bit about 21st century journalism and online business models. The best way to understand my perspective is that I'm far enough removed from the daily grind that I no longer have a personal interest in the outcome, but I'd like to see what was good about journalism conserved across this Media Interregnum and translated into modern forms. And I'm generally appalled by the lack of curiosity and excitement that my profession has demonstrated in the face of this revolution.

SB: In your 2020 Vision: What's Next For News, you predicted that companies that build their news platforms on informatics-friendly systems “will grab the first sizable newsmedia profits from sources other than advertising and paid subscriptions.” Can you explain what you mean by that and how a company might grab those profits?

DC: I call that idea “The Informatics Scenario” and I went into some detail explaining it here . Basically, companies have to learn how to capture potentially valuable data in their standard newsgathering workflows. This means we'll need to update our word processing interfaces (check out the work E-Me Ventures is doing with Zemanta on this) so that they integrate data collection into newswriting. I suspect this will be a combination of automation and good database design/management.

The example in the post I just sited is how I might cover a fire if I were thinking semantically, and the answer is you include structured/semistructured information that doesn't appear in the “story” but would be useful to potential clients for fire-related data: insurance companies, lawyers, certain types of vendors. None of this changes the individual fire “stories” that reporters write (other than making sure the facts are solid), but it creates a new product that ISN'T generic.

One important thing I learned from blogging this idea is where people lose the thread. The biggest misunderstanding people have is that they think “Well, if the data is so valuable, then why are people giving it to us?” The insight is, the data isn't valuable, at all. The value exists entirely in the quality of the structure in which the data appears. Data without structure is just noise.

This is why newspaper archives aren't valuable as data today. Because archives are structured as collections of narrative stories, the cost of mining usable data from news archives typically exceeds the value of the resulting data set.

So the goal for news companies will be to understand what information is valuable to which industries and sectors, and then to integrate good data practices into their newsgathering. Ultimately, this should lead to some industry-wide data standards, perhaps a cooperative consortium or two.

SB: One of your most intriguing predictions in the 2020 vision was that: “News organizations will give away their human-readable documents and sell their datasets.” Can you discuss an example of a dataset news organizations have or could develop that have this kind of economic potential?

DC: The obvious example to me is that once you create the ultimate compilation of geo-tagged data sets for your neighborhood, you've got all sorts of products. So for starters, I could license my collection of map overlays to real estate companies that are showing MLS listings on their sites.You want paid content? Then start producing proprietary data-set mashups. They're unique. You can't “quote” from them. There's no fair-use issue. Go ahead – put up a paywall!

So if local Realtors are licensing my overlays, that's giving them a competitive advantage over sites that don't have my overlays. Think about that.

And meanwhile, I'm free to start developing my own products. Let's say I want to create a “community quality index” based on a publicly available algorithm that crunches different sets of numbers that I've structured, collected, etc.: crime rates, school test scores, price per square foot, etc. If I put that on my site and make that tool available to paid subscribers – let them pick and choose data to display, areas to compare, etc. -- then I can do that and sell ads on it. In fact, building unique mashups and user tools should be the engine that drives online news subscriptions in the future. Because they're USEFUL and UNIQUE and COOL. Why else would I pay to read free, generic narrative news and opinion? Give away the documents, sell the data.

SB: You forecast that news organizations might fund their operations “largely by getting paid for adding value to transactions on behalf of the buyer.” What did you mean by this? And can you discuss an example?

DC: So I'm not a golfer, but one of the things I noticed back in 2005 was that all the news execs at my company were useless in the afternoon because they were trying to find out if there were any discount tee-times available. So I thought, Well, there's a business: We build a site on our site that lets all the local golf courses offer real-time discounts to fill available tee-times. Hence, if I'm the starter at Joe's Golf Course and it's 3:15 and I've still got an open tee-time at 5:25, I log on to my free vendor account and type “Four-person 5:25 tee time at Joe's Golf Course, $25 per player, marked down from $50, first response takes it” and it pops up on the site. The first person to click on that link and enter credit card info reserves the tee time.

As the news company with the golf site, I added value for the seller (Joe's Golf Course got paid for a late available tee-time) and the buyer (someone got a discount for something they wanted). I didn't have to worry about pricing, selling accounts or any of that stuff. I simply take a percentage (say 15 percent) of the transaction, which goes directly into my account before the rest of the money gets sent on to Joe's Golf Course.

My company never went for this idea, although I've heard there's a web service like this now. How much better would it be if it were part of the news site that represented the No. 1 source for local information? I had similar proposals for real-time restaurant deals, etc.

How would you do this with car shopping? Or apartment rentals? Maybe you'd offer an online inventory service that allows shoppers to compare locally available items. I dunno. But in every case, you'd have to figure out where you can add value to the transaction and then let that insight guide how you get paid. One size does not fit all. You don't buy and pay for tee times like you buy and pay for cars. So you figure it out, case by case.

In any situation you imagine, both buyer and seller benefit when a deal is made. What's different in this model, however, is that instead of acting as the agent for the seller (advertiser) you're really acting as the buyer's agent, because you're providing commercial info that's vendor agnostic. You're not pitching for one seller, you're creating a free marketplace in which commercial information is available in useful ways. And if it's the best marketplace, then people will come there to do business... which means ... you can sell advertising on it, too.

Putting the seller at the heart of your business and then pretending that your company is acting on behalf of the buyer (our industry's status quo) is fundamentally hypocritical. Reversing that paradigm aligns our interests in a way that offers integrity and clarity.

SB: You cited 15 potential business models in the “known competitors” section of your 2020 vision. If you were running an established media organization trying to make the transition today, which of those would you pursue first and why?

DC: Honestly, it's just too late for a lot of these established news companies (think corporately owned mid-sized metros) to make the transition – particularly if they're carrying a heavy debt load based on their acquisitions policies. My advice to those guys is: negotiate the best terms you can and get out. Read Section I, Item 5.

But let's say you're a moderately leveraged media company with some brand value in your local metro market. Let's say you're losing money on your daily paper and that your web operation, even without a comprehensive P&L sheet, is really just breaking even.  If that's you, try this plan:

1. Drop your AP membership
2. Cut back the number of days you publish a metro print edition:
3. Use that freed-up press capacity to create any niche pubs demanded by your market.
4. Get out of any business that you don't understand and don't do well. That could include getting out of the news business entirely (Section I, Item 5, again)
5. Shift your daily focus to Item No. 2: Web-only news sites. This is your new core product. Adjust your P&Ls accordingly, and put your energies into making this subset profitable.
6. Your print editions, which are no longer dailies, now become a subset of your news org's products. They cost whatever they cost to produce and distribute, but your editorial costs consist of hiring some decent page designers and rewrite editors. Think of the print edition as a form of premium content (Item No. 3) If you can make them profitable, keep them.  If not, drop them.
7. Add premium content (Item No. 3) ONLY in those instances where what you produce it is UNIQUE, USEFUL and COOL (cool as in: It addresses a topic where people want to be).. Immediately turn your website into the best intelligent aggregation (Item No. 15) of all news in your market. Include commercial information, too.
8. Begin exploring sponsorships and micro-sponsorships (Item 8) for specific aspects of your operation/products. General “support our brand” sponsorships for legacy media don't make sense. And be prepared to give something of value back. This isn't a magic bullet – it's a spot on a buffet line.
9. Begin aggressively developing every possible opportunity for providing shared infrastructure (Item No. 5, a.k.a. “content enabling”), even if you're providing it to your “competitors.” This could include something like providing the shared editing and printing resources to turn a local conservative news site into a printed publication, or, in the case of Charleston, spinning out a news staff that serves a liberal-to-moderate audience. Stop pretending to be all things to all people, even if that means accepting slim margins. Those old fat margins are never coming back anyway. Sharing infrastructure makes slim margins more attractive.
10. If you've divided up your publication into more targeted products, then immediately pursue Item No. 10: Interest-funded journalism. Do you have a conservative product? Get the Heritage Foundation to fund three in-depth investigative projects this year. Got a liberal product? Let Greenpeace fund a series on water quality. Be transparent about all these arrangements and show your work.
11. Approach every for-profit sports team in your market (yes, that includes “revenue” college sports) and begin discussions about direct subsidy programs (Item 12). The pro- and semi-pro teams in your market depend on your sports section as part of their business. So why not be in business together?
12. Start making plans for value-added transactional products (not listed here) and developing your own Informatics Scenario. And once you've got that in the works – but not until – start talking about Item No. 13: Premium accounts. To sell a premium you must offer a premium

SB: You said that, “Sites that develop intelligent ways of curating old information could play a big role in the presentation of breaking news information.” Can you give us an example of a recent breaking news story where curation of archived information could provide current value?

DC: Well, the most glaring example is health care. The press is covering this story as if it were a series of Jerry Springer showdowns at town hall meetings. Which is just shameful. Every news organization that claims to cover health care reform seriously should have a carefully edited, constantly upgraded page that links out to everything we know about health care in America, health care elsewhere, previous efforts at reform, current proposals, critiques and compromises, etc. And I'm not talking about a link dump here: You'll have to build the topic infrastructure with lots of summary and explainers, and the idea is that you can link down to definitive statements about every topic, with links out to source material.

I'll bet if you did a really great job on that, you could sell your curated explainer web pages to other organizations, too.

Health care reform isn't really a breaking story. And if all you offer readers is a selection of links to old stories, that's just inexcusable. That's treating this huge issue in American life like the plot of the movie Groundhog Day.

SB: You’ve been out of the newsroom for a year now. From that distance, what do you see as the major cultural obstacles that newsroom leaders need to address to prepare their organizations for successful innovation?

DC: In most cases, the newsroom leaders are the cultural obstacle. They don't like to hear that, but it's true.

This is why I feel like a Bond villain sometimes when I talk about newspapers: “Innovate? I don't expect you to innovate, Mr. Newsroom Leader. I expect you to DIE!”

And I'd like to be wrong about this, but today's newsrooms aren't focused on doing good work or innovating – they're focused on not getting fired. I'm sure there are exceptions, but this is the new rule.

Newspaper employees need to understand this: Reporters and editors used to be the people that other people wanted to invite to their parties because we knew stuff and told the best stories. Nobody wants to invite us to parties anymore, and I think that's because we're a bunch of bitter, know-it-all jerks whose only discernible message in the 21st century is “GET OFF OUR LAWN.” If people don't want to talk to you, why would they want to read you?”

So my biggest piece of advice is, stop being such unpleasant, unhappy human beings. Start with that.