Advice for regional news groups in the networked economy

September 23rd, 2009

Regional newspaper publishers are gearing up to play a big part in the future provision of ITV news following a government report.

was the news on Hold the Front Page

Which prompted the comment:

So these big newspaper groups can find the money for television projects, but are starving newspapers to death? Blimey. I presume they realise television wages are more expensive than some of the pittances I’ve seen being offered on this very website for qualified journalists.

What intrigues me is how they will generate their revenues? What will be the business model? What will sales be offering their advertisers? Now I reckon its going to be the furniture of advertising that once did all it was supposed to do, but no longer, display advertising.

So lets gets this straight:

[1] We live in a search economy: we search for information, and we judge that information by its ability to enable us to make transactions and take decisions at time critical moments, very often. Thereby, if media groups cannot find an innovative and engaging way to take advertisers money and deliver relevant, timely and contextual information. Its money down the gaping black hole of the drain.

People: Display advertising is the junk mail of the 21st Century. It beats me, in fact it exasperates me, that media companies have taken the furniture of advertising enabled by Gutenberg, and they have dragged it comatose into and onto the web, and some even believe that they can then drag its lifeless body into and onto the mobile. Why does Facebook struggle to make money, whilst World of Warcraft, or Cyworld coins it? How close to a big fat ZERO do you need to get to before people realise click throughs don’t work!!!!

Regional newsgroups have shown by their singular failure to demonstrate leadership and a vision for the networked economy that their vision of the world is out of date and inflexible. The problem is that businesses leaders, and senior management lack the language, creativity, and revolutionary spirit our moment demands. In many cases they have been badly corrupted by power, position and prestige.

Just because you now can produce and distribute audio-visual content does not mean you de-facto make money with an antiquated business model, most inappropriate for our times.

[2] By default of [1] we are defined by a pull economy which is also defined by the economics of attraction.

[3] We are also defined by networked economics. Briefly, networked economics is about economic models, that for example reward effort and creativity by sharing social capital and the commerce. Kevin Kelly explains this comprehensively here are some relevant highlights for newsbrands and media companies:

* Global Accounting – Even small businesses become global in perspective. Unexploited, undeveloped economic “frontiers” disappear geographically. The game shifts from zero-sum, where every win means someone else’s loss, to positive-sum, where the economic rewards go to those able play the system as a unified whole. Alliances, partnerships, collaboration, even if temporary or paradoxical, become essential and the norm.

* Coevolved Customers – Customers are trained and educated by the company, and then the company is trained and educated by the customer. Products in a network culture become updatable franchises that coevolve in continuous improvement with customer use. Think software updates and subscriptions. Companies become clubs or user groups of coevolving customers. A company cannot be a learning company without also being a teaching company.

* Knowledge Based – Networked data makes any job faster, better, easier. But data is cheap, and in the large volumes on networks, a nuisance. The advantage no longer lies in “how you do a job” but in “which job do you do?” Data can’t tell you that; knowledge does. Coordination of data into knowledge becomes priceless.

* Increasing Returns – Them that has, gets. Them that gives away and shares, gets. Being early counts. A network’s value grows faster than the number of members added to it. A 10 percent increase in customers for a company in a non-networked economy may increase its revenue 10 percent. But adding 10 percent more customers to a networked company, such as a telephone company, could increase revenues by 20 percent because of the exponentially greater numbers of conversations between each member, both new and old.

In network economics the customer can expect increased speed and choice, and more responsibility as a customer. The provider can expect increased decentralization of all functions and increased symbiotic relationships with customers. Finding the right customer in the chaotic web of infinite communications will be a new game.

[4] Jeff Jarvis bangs on that the value is in the links. I think he is right its just that what is required is a better business articulation of that. Which means that links must bring greater value – information which is connected to a business model. And maybe its a hybrid business model of multiple parties sharing in financial reward.

[5] These platforms must be designed with embedded sociability.

[6] Social intelligence and refined Social Marketing Intelligence, derived through analysing and refining massive data flows is the black gold of the 21st Century. Do these news groups have a 21st Century solution to how all information, content etc must also be connected up to a taxonomy that weaves commerce into the platform in more ingenius ways

I have a 5 year plan

If Martin Luther King had stood up in front of all those people on that famous day and made his speech, and, if he had said I have a 5 year plan – how do you think the crowd would have responded? Newsbrands have an opportunity to reinvent themselves, they must embrace their mission what ever that is to truly embed themselves into the fabric of local lives – which means rethinking journalistic practice, investment in the thing that is supposed to make those businesses flourish good, creative, engaging journalism.

How do you as a newsbrands do that? If the Johnston Press is now asking an editor to be THE EDITOR of 5 local newspapers because of cuts – how on earth do they expect to deliver god compelling content? S why not offer guest editorships – why not ask the local football team to do their version of the paper? Why not fold citizen reporting into the newsbrand – why not reach out to schools and ask them to engage – there is so much for you as “professionals” to offer.

In a Read / Write culture where Nokia says 25% of all media will be created by us by 2012 – we start to get into serious issues of: media and ethics, personal accountability, the role of the citizen, critiquing, fact checking, editing; film and images.

Or do you as a media still believe that you alone have the sole right to create culture and content and that we the great unwashed must merely consume it.

You will know when you have succeeded when you have put all the free sheets out of business.

In my post Straight line thinkers struggle in a world of no straight lines, I write,

Our world of business, media, and communications is evolving from the straight-lines of an industrial era to the more complex and networked world that mimics nature. This interactive networked world isn’t about vertical silos, traditional notions of product and service creation, mass-production and mass media and marketing. It is about the massive flows of people, who are connecting, collaborating, organising and creating in a manner that has nothing to do with a linear approach too much at all. This is truly an engaged and participatory culture.

For over 150 years our economies, culture and society have been shaped by a straight-line logic producing considerable economic success. However, in the dawn of the Networked-Society, a straight-line logic of getting stuff done becomes a barrier to progress. Why? Because, the change wrought by the networked- society is structural – challenging how markets and organizations have co-evolved over the last 150 years.

This creates a dilemma. And the dilemma is this – How can firms and the people that work in those firms, develop coherent strategies/products and services that are premised upon No-Straight-Line principles – when they have been versed only in Straight-Line thinking – at least for the over 35’s – from birth?

Further reading: Traditional media must engage or die

Social Marketing Intelligence and data in the networked economy

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