Murdoch: Reality or Nostalgia?

February 25th, 2010 No comments

Rupert Murdoch was much derided for his attempt to promote the use of pay walls (The requirement to pay before receiving access to the site), but the New York Times and others are singing the same tune with their support of Steve Brill’s Press+ paywall software. The New York Times have announced they are going to use it for some of their blogs though they haven’t announced which blogs yet.

Rupert Murdoch described two kinds of readers. Those who arrive through search engines, about which the content provider has minimal information, and loyal readers. He has difficulty monetizing the fleeting search arrivals and relies on the demographics of the loyal readers to sell advertising opportunities to those with significant advertising budgets. The resulting conclusion that this search traffic must be behind a pay wall was derided by many commentators as nostalgic nonsense.

Maybe Mr Murdoch is just dealing with the reality that search driven traffic comes with insufficient data to allow advertising to pay for the cost of paying journalists.

While loyal readers and advertising may pay for the lower costs of digital content for main stream content there is going to be a section or category of content which can’t raise, say $200 per story, and for these more specialized articles to be written by paid journalists there needs to be some kind of pay wall model. It is easy to imagine this for specialized trade press particularly targeting high margin businesses such as financial services but what isn’t yet clear is how large the paid market is under main stream brands such as the New York Times or the New York Post.

Outside of high volume advertising based model, and the paywall model, the remaining models are of sponsorship, subsidy, pro-am journalism and advertorial where there is no attempt to make significant revenue directly from the content. The recent comments by Jeff Jarvis regarding hyper local content and CUNY’s venture with the New York Times are leading in this third direction with a combined pro-am and advertorial flavor maintained with minimal advertising revenue.

All of these models will inevitably exist for different kinds of content both for separate publications or combined within different sections of the same publications. We just need to let things settle out and see how much content is going to be consumed under each model.


Shopping Malls Can’t Charge Entrance Fees. So What?

July 5th, 2009 No comments

There seems to have been so much hot air as people struggle to understand Freeconomics. The idea that data will be free. Hopefully we are getting to the end of that debate.

Newspapers discovering they can’t charge for their web sites, or for that matter any service now finding itself in data form, is similar to shopping malls discovering they can’t charge an entrance fee for their splendid walled garden. So they make money in other ways. If shopping malls can’t make ends meet they aren’t going to be able to cover their financing with billboard fees so they had better suddenly develop one splendid food court or sell up to somebody with other ideas and move down to Florida.

Likewise the Music industry is discover that their consumers consider charging for copies of music a greater crime than the copying and are refocusing on convenient video delivery and concert performances.

While the incumbents are bound to try to protect their positions increasingly they need to just get on with adapting or cannibalizing themselves into new businesses because there are few people left who believe the arguments of artificial scarcity and want to listen to the sulking about how profitable their business use to be.


Social Entrepreneurism

June 27th, 2009 No comments

One of the topics that came up in this week’s Thursday Morning Coffee Meetup was the extent to which companies should be following social rather than financial objectives. Most people want to do their bit for society and it seems that possibly the majority of people in the startup community are wanting to adopt a primarily social or charitable focus to their activities. I can’t help worrying that this is not a realistic path for most of the people following it. If one is generating cash then diverting a potentially significant proportion to charity definitely helps us all but trying to factor in social objectives to every business decision leads to some very difficult decision making.

One can barely travel to a client or deliver a product and present it as ecologically sustainable. Even the much heralded virtues of the ingredients of some chunky ice creams are really greening of a product which clogs arteries and even kills off customers. Trying to be truly consistent could lead to some very long office meetings. The effect would tend to be a weight on the ecologically and socially conscious businesses. The more equitable way forward, I would argue, is for people to be better informed to be able to make the decisions they need to make and to be less shy about regulation so that businesses are on a level playing field that takes account of wider social impact. For each company to try to decide this for itself is a less practical solution than the regulation adopted in Europe, Japan and increasingly in China.

The prevailing wish in the discussion this week to have corporations manage the decision is probably in large part an effect of being in US culture where there is minimal regulation, little supervision and a lack of any notion that government should have a more active social role. Or even be effective in general. Corporations seem to be looked to to solve all problems. Our national government spends less than 0.5% of spending on education, less than 1.5% on social programs and a total of 48% of non overhead spending on the military. So the idea that the national government should be taking care of social expenditure, taxing carbon emissions and other destruction often seems foreign. It does seem though that at least the need is being identified, which is a cultural change for the US, if the solution being discussed is still a very different one.


Customer Service

April 25th, 2009 No comments

I have been trying a Skype collaboration plugin (Which they call an Extra) called Yugma. Of course despite having a good impression of the Skype brand before downloading some potentially time wasting tool I read the user comments.

So the comments were more promising than a competitors where most people were discussing problems trying to uninstall that product, but what really interested me was how high the expectations were in people’s comments of interaction from Skype and the Vendor of the Extra. People expected to be listened to and interacted with. They didn’t expect a faceless corporate stony silence.

They expected the kind of meaningful response that one would want from an account rep in an offline environment. In this case they received it from Yugma in the form of Liz who begins and ends her post with her name. Something which I noticed I reacted positively to.

The need to be aware of and rapidly responsive to customers in all communication channels is so important in today’s customer service. It is so much easier and more cost effective to achieve with web sites and modern communication but sadly so many companies drop the ball and allow the geographic separation to cause them to disregard customers in a way which they never would in person. For customers to love the product and recommend it these communications are so important.

I installed Yugma, the product with better user comments and responsive human customer service. Of course it doesn’t seem to function with the latest version of Skype. It’s difficult to apportion blame but given the comments to this effect and the lack of response from Skype it rather appears that Skype don’t have their act together in managing the versioning of Extra’s from this and other Vendors. Yugma +1, Skype -1. Of course if the app execution worked one could really award some points!

Categories: Management Tags: , ,

Tennis at Grand Central

April 12th, 2009 No comments

Just when I thought I had found all the little features of Grand Central, walked the length of the pedestrian tunnels, heard countless references to the secret train line to the Waldorf, pointed out the one dirty roof tile above Michael Jordon’s bar showing the original state of the uncleaned ceiling, learnt to avoid the overpriced pickled herring in the Oyster Bar and found the best time of the week to get a seating area in the Campbel Apartments now I find that there had all this time been not one, but two tennis courts on the roof which were available to the public, at the unfortunate fee of $170 per hour mind you. But hurry the concession is about to close to make room for a staff locker room.

Categories: New York, Travels Tags:

The Next Big Thing: An End to Distraction

March 14th, 2009 No comments

With all the chatter, twitter, email and popping up nonsense on our screens what we crave is silence, simplicity, blankness. Space for a thought to get executed upon.

We need silence, minimalism, space.

Nothing new here. This is why people craved vacations or libraries before our hyper connected days.  With all the thought candy out there, just a google search away, every momentary pondering has the potential to loose another twenty minutes. Self discipline can prevent that but the elimination of every email, message arrival announcement, anti virus update, weather alert and even network disconnect notice has to be fought for in order to keep focus.

Hopefully product managers can take this on board and start defaulting some of these notifications to off for us, and potentially those of us plagued by Vista will be returned to a more productive life with Windows 7. Or is that just another hope.

Categories: Technology Tags: , , ,

Do we deserve all the world’s credit?

February 21st, 2009 No comments

In the US we have consistently been the largest single country economy and provided a safe place to invest through world wars, cold wars and crises. We are currently home to 14.3 of the 78.3 trillion global GDP (18%). Dwarfing the next largest, Japan with 4.8 Trillion or 6%.

From the initial European settlements in North America forward, development was funded by states and corporations on the understanding that there was opportunity for agriculture, mining and settlement in the US and that what was needed to realize it was inward investment. America grew up, as a result, with a more positive view on credit and continued its growth with continuous net inflows of capital to the current day.

We borrow from the historical sources of Europe but also Japan, Switzerland and now China. At present if we thought about our government’s flows (i.e. excluding private capital) and mapped it down to the level of families, every family in the US has borrowed $3,000 each from five families in China who have worked all hours to produce the resources we wanted. Additionally we also borrowed from the families of Japan etc. This allowed us to finance government spending, agency purchases of mortgages and the life we currently enjoy.

All too much of that money has gone into financing credit for larger homes and larger SUVs and a lower proportion into education, infrastructure or other key elements of a competitive economy. We are now in a position where the tools of advanced manufacturing and management training are available in any region of the world and where capital is fungible and flows to where it can be best used. This has led to greater global growth and a more equitable distribution of opportunity.

With the more level global playing field though, we can no longer assume that the US is the only opportunity for growth or the rightful home of the world’s capital. The financial collapses have a significant impact because when the recovery occurs it is a global financial system made up of global banks from many homes. Global markets will no longer be run by people who grew up with baseball and are only familiar with our culture. As liquidity returns it will flow more equitably to all corners of the world.

The current stimulus plans will inflate the economy and are an important part of moderating unemployment. There are strong grounds beyond economics for wishing to keep unemployment below 20% and avoiding the wrenching pain on the social fabric that high unemployment causes but the stimulus plans will not make us globally competitive in a rapid timeframe.

We will remain a premium economy, as does Europe, with a strong work ethic but not as strong as Asia’s. Asia will become like us but is starting from a base which learnt its attitudes in a very tough world. Our educated people will continue to have expectations of their lifestyle which are different to those of much of the world. As a result we will get a fair allocation of the capital on a recovery but will not return to the world of the 90s let alone the 50s.

We are still the world’s global reserve currency if we don’t cause alarm by searching for excuses as to why we won’t repay our creditors or race headlong into hyper inflation. The level of debt that we have, and are about to incur, is substantial and paying for it will absorb an increasing proportion of Federal tax revenue so we can’t rely on mindless spending as the main solution.

We make up a very flexible, nimble economy, which will be able to adapt far better than many in Western Europe but we need to focus on building our competitive position and setting realistic expectations for our lifestyles going forward. The days of earning $1 and with the help of mortgages, equity credit lines, loans and cards spending our current average of $1.33 on lifestyle are over, if we like it or not.

Categories: Finance Tags: , , ,