Sunday, May 13, 2007
BUSINESS WEEK: It's tough to make local work on the web: Wally Bowen
http://www.businessweek.com/magazine/content/07_13/b4027019.htm?chan=search
Wally Bowen of Mountain Area Information Network writes:
This Business Week article underscores the difficulty of creating an advertising-supported, local journalism web portal. And it also underscores the potential of our business model, based on ISP revenue and public radio-style underwriting revenue from both online and broadcast platforms. Optimizing the underwriting will be based on our ability to build our online audience, especially as more and more folks stream WPVM on the web.
MARCH 26, 2007
MEDIA CENTRIC
Down And Out In The 'Burbs
Turns out it's tough to make local work on the Web
By Jon Fine
Business Week
There are media geeks who have been waiting ten years for the Web to take over community news. Pick a town, preferably one in a well-heeled suburb, that's underserved by the big metro newspaper. (What suburban town isn't underserved by the big metro newspaper?) Set up a site incorporating the superstructure of this online age: blogs, places to post video, interactivity everywhere. Stoke audience participation, use some variant of the phrase "citizens' media" at every opportunity, keep staffs small, sell ads to tightly clustered readers. Repeat. "Whoever can get this thing right.there's a lot of money there," says Josh Grotstein, co-founder of venture capital firm SAS Investors.
Note the conditional. SAS invested in ultralocal player Backfence, which launched in 2005. It was the brainchild of washingtonpost.com veteran Mark Potts and Susan DeFife, and backed by $3 million in VC funding. Potts resigned in September, 2006.he won't discuss why.when Backfence had 13 sites covering the 'burbs of Washington, Chicago, and the Bay Area, and was talking about rolling out more. DeFife left in early January and was replaced by...Potts. He now runs what's left of it while mulling the next move. A staff of about 30, as of late last year, is down to around five. Today, DeFife boasts that almost 600 local advertisers signed on. But Potts concedes that ad response was "not what we wanted it to be" and that the money is running out.
THERE ARE DOT-COM ERA ECHOES in Backfence's saga. Take last December's holiday party at DeFife's suburban Virginia digs: All staffers, who were spread across three time zones, were told to attend.barely three weeks before a massive layoff. So you can't extrapolate from Backfence's example that there's nothing to the niche. Still, even exemplary players confess the business end has proved tough. "We have not been able to determine a revenue-generating stream from that traffic," says Robin Saul, president of the Greensboro News & Record, a paper noted for its smart, locally grounded Web strategies.
Beloved backyard media efforts dot the U.S. There are scruffy independents, like iBrattleboro.com in Vermont or baristanet.com in New Jersey. There are those attached to extant operations, à la the News & Record. But, as Backfence found, to build a site from scratch is very difficult. (A former Backfencer says explaining the site to potential users left them feeling they were being sold something, as opposed to being given something.) And building one site successfully does not make it easier to build another elsewhere. "The virality that works nationally doesn't work locally," says Potts. In other words, the national echo chamber that can spur massive growth on MySpace (NWS ) won't work for separate community sites. All the more so for Backfence, which sought to let users create much of the content. It's easier for sites driven by a talented, semi-obsessed writer or two, like baristanet, to gain traction: Readers return for a stylish voice or a dependable hit of news.
"The beauty of the Web is that it is very efficient and very inexpensive to create [local] communities," says DeFife. But that didn't help Backfence make a buck. Today, Potts sounds most bullish on a partnership with a larger media company in which Backfence's technology gets licensed to a bigger player. This is a step back from January, when Potts promised making the sites more robust.
But Backfence's technology cannot handle video, which is where big opportunities lie. Meanwhile, some established players are Backfencing their operations. The nation's largest newspaper chain, Gannett, is now enabling and ramping up local participation on its sites. It's easier for a local daily to promote these efforts than a new face with a new name. Backfence's executives thought they saw a sweet spot but ended up flanked by the solo entrepreneurs on one side and the Gannetts on the other. They found that the middle of the road is often nowhere at all.
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Minnesota alt-weekly editor departs with insightful Q&A about MSM future
http://minnesotamonitor.com/showDiary.do?diaryId=1566
Here are a couple of excerpts of Perry's verbatim comments:
On finding a revenue model . . .
"The main issue for journalism is still monetizing the web, making a web platform pay for the kind of staffing that can produce useful original reporting. I have no idea how that will happen, but the smartest people I know on the marketing side of the internet think part of the answer will be elements of paid content. I know that's heresy to most users -- who doesn't like content that's all free all the time? But it's not all bad from the readers' standpoint, either. There's nothing like making people pay for content to ratchet up the pressure to make it ambitious."
On network neutrality/control . . .
"And beyond the pressures to make it a more exclusive tool of corporate commerce, there is also a lot of political anxiety about how wide-open dialogue and dissent can be on the internet. Do you remember the phrase the late Samuel Huntington coined to describe the political tumult surrounding Vietnam? He called it a "crisis of democracy," meaning there was too damn much democracy, too many voices demanding to be heard. The internet is a continual crisis of democracy in that sense, and it's naive to suppose it will stay as open in the future without political fights. There are those people who deem it unthinkable, or even technologically impossible, to limit American citizens' access to information on the web, but they're just plain wrong. (Every new communications medium spawns this kind of utopianism -- there were people in the '20s who thought radio would bring the revolution, and people in the '50s who thought TV would increase civic participation. Heh.) It's not impossib!
le to hamstring web users. The best thing I've read on the subject is Jack Goldsmith and Tim Wu's book, 'Who Controls the Internet? Illusions of a Borderless World.' You have to read it if you haven't."
Web Page: http://eyeteeth.blogspot.com
Email: paul@eyeteeth.org
Paul Schmelzer is a Minneapolis-based writer. He blogs for Eyeteeth, the Walker Art Center, and Worldchanging-Twin Cities. His writings on, media, art and activism have appeared in Adbusters, Alternet, Ode, The Rake, Utne, The Progressive, and Raw Vision.
Thursday, May 10, 2007
BACKGROUND: Craig Newmark in the lion's den -- speaking to publishers
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1003581648
Craigslist Founder: People Who Run Printing Presses 'Screwed'
By Jennifer Saba
Editor & Publisher Online
Published: May 07, 2007 12:20 PM ET
NEW YORK -- You have to hand it to Craig Newmark, founder of the wildly
successful classified site Craigslist, for telling it like it is to an
audience of newspaper publishers.
Newmark, along with New York City Mayor Michael Bloomberg and talk show
host Charlie Rose, opened the Newspaper Association of America's annual
convention here in New York City this morning.
Newmark fielded questions from Rose pertaining to Craigslist's rise to
prominence, mainly at the expense of newspapers. The mostly free
classified site, which covers such categories as real estate, help wanted,
personals, and general merchandise, has been taking important classified
dollars away from newspapers. The site claims over 7 billion hits a month
worldwide.
But Newmark doesn't feel guilty about the ongoing shift of classified
dollars away from the medium. While he is a champion of more investigative
reporting in newspapers -- which he admits costs money to fund -- he
wasn't going to let the crowd boo-hoo about revenue woes. He deftly
mentioned newspapers' high profit margins -- somewhere in the ballpark of
10% to 20% -- as proof there is plenty of money to feed investigative
journalism and the newsroom. "I don't understand what the problem is," he
said.
"People like Helen Thomas need backup," he said.
Newmark told an all-too-knowing audience that this is a time of "creative
destruction" and that he has a "great deal of sympathy for people who run
the printing presses. They are screwed." It's not that journalism is
becoming obsolete; rather the delivery methods are changing: "Even the
kids realize news is important. The problem is paper is too expensive," he
said.
Newmark doesn't worry about his site's demographics or potential value. He
chiefly serves as the company's customer service representative.
Determining a new market is arbitrary, Newmark revealed, and is mainly
based on the "mood" of Craigslist CEO Jim Buckmaster. If people request a
small town and the Internet usage is good, they might launch a new city.
"We have no advertisers to keep happy and no investors to keep happy.
That's a great relief," Newmark said to about 250 newspaper executives
from around the country, who probably wish they could say the same.
He said his operation was taking even stronger steps to weed out
"scams" and young people posing as adults. This is one reason for charging
a nominal fee for the service in some areas.
Asked what he was doing with the riches he had earned, Newmark said he
lives simply, but could use a new "birdfeeder." The one he has just
doesn't attract as many hummingbirds as he would like (he has a Web cam
set up to view them).
He told the crowd to start taking cues from Jon Stewart and Stephen
Colbert who hold politicians and lobbyists to the fire. "We should see the
equivalent of that in newspapers," Newmark instructed adding that he also
listens to NPR, reads the San Francisco Chronicle, The New York Times,
watches CNN, has a "bizarre fascination with Keith Olbermann" and checks
in with blogs like Gawker and the Huffington Post.
When asked by one audience member if he were to start a newspaper today
what would it look like, Newmark said, "I haven't really thought about
it." He did say it would involved lots of investigative reporting in "big
areas," would be Web friendly and easy to print out.
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Jennifer Saba (jsaba@editorandpubisher.com) is associate editor at E&P.
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The article above is copyrighted material, the use of which may not have specifically authorized by the copyright owner. The material is made available in an effort to advance understanding of political, economic, democracy, First Amendment, technology, journalism, community and justice issues, etc. We believe this constitutes a 'fair use' as provided by Section 107 of U.S. Copyright Law. In accordance with Title 17 U.S.C. Chapter 1, Section 107, the material above is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this blog for purposes beyond fair use, you must obtain permission from the copyright owner.
