Rji-pej-report-video

Here are Bill Densmore's contemporaneous notes of today's video stream:

FILE NOTES OF TOM ROSENSTEIL, MARK JURKOWITZ AND MIKE FANCHER.

Tom Rosenstiel: The Wired Magazine utopian view. The mass market at the front end of the tail, where big media was would fragment. But you would be able to reaggregate a mass market. “Well that’s one thing that hasn’t happened. What happened online is people migrated from legacy platforms to the same brands online and you had many organizations that actually saw their audience grow for the first time.” NYTimes has 20 million to 50 million unique visitors to its website every month. “The NYTimes audience is substantially bigger than it has ever been and maybe by a factor of two or three” . . . “that was one unintended, or unexpected consequence, when people choose, they choose familiar brands.”

Advertisers didn’t migrate. “The web turned out to be not a good platform for traditional advertising and I think there are three big reasons for this:”

n Advertisers no longer need the media to reach their audience – Craig’s List is example. More than 75 percent of classified advertising that was in newspapers in the year 2000 has gone – vanished. That was about 40% of newspaper revenue and the most profitable.

n Scarcity – no limition on the number of websites, so the amount of money you can charge for a website ad is small and it is decreasing. The CPMs for local display advertising has dropped by 15-20 pecent. There’s little you can do about that problem of scarcity if you are selling generic ads that are not personalized or customized.

n The interface, the way people connect online is antithetical to the old form of advertising. It is a lean-forward experience. When you find through search the estory or content you are looking for, and you click on it, thekind of advertising associated with news – banner and pop-up – the impulse is this is not helping me find the content that I have finally arrived at. “We’ve got lots of research that suggests people don’t like pop-ups ….. they are not user friendly.” Old legacy media was more of a lean-back media experience. When people turn the page and see an ad, it is another form of content, they look at it and they appreciate it.

People are doing two things on tablet that they are not doing on computer. Tend to go via apps and bookmarks and are not tending to search as much. On tablets and to some extent on smart phones people are reading long-form.

FANCHER: With the opportunities to be seized will the culture of news organizations allow those opportunities to be seized. Neither new media nor old media are making money in this new environment. PEJ surveyed newspapers of all sizes about their business modesl and Jurkowitz is providing a summary of what they found.

JURKOWITZ: PEJ’s plan was to enlist a number of newspaper companies to provide proprietary and confidential revenue data about digital revenue that would provide an empirical grounding for what was happening. For much of 2011, he visited seven companies to get their cooperation. “Those were long meetings,” he said. People talked candidly about the institutional dynamics of trying to make the transformation. “This is the idea I think we need, but I’m having a hard time selling it internally,” he says he was told. People in positions of authority weren’t necessarily communicating.

“We then received from about 40 newspapers this proprietary digital revenue data,” he says. They focused on the adveritisng-revenue side (rather than online subscriptions.) “The numbers were pretty grim,” he said. For every dollar gained digital seven was being lost in print. Now it is to 1:10. Most newspapers were still selling most of what they were selling digitally, were the old legacy products – classifieds and banners. Mobile was being sold small and the sales staffs weren’t geared up to sell them.

They then went back and interviewed executives at six originally companies and seven more, a total of about 25% of the nation’s circulation. They asked: “Name the single biggest obstacle your company has toward making a transition to a new digital model.”

Ten of the 13 described a culture war. “A still seething tension internally between those pushing for a more digital future and, for want of a better world, people still steeped in the legacy culture,” he said. In most cases the problem was on the business side, among the sales staff, not in the newsroom. This internal battle was not resolved, Jurkowitz was told. That’s when they seized on that as a critical find of their report.

Success path

JURKOWITZ: Of the news organizes that were showing some success, most were trying to work on the “digital agency” model – helping advertisers by being a consulting services to local advertisers to build their own online presence. They were also aggressively retooling their sales staffs. They were used to selling the print cash cow. “Print dollars are still representing about 85% of the revenue, so sales staffs want to go where the money is.” There has been figurative bloodsheet --- where 50% of sales staffs had to be turned over.

ROSENSTEIL: If you were a startup, you would be trying to create brand. Newspapers have that, and they have demographics as well. The other big issue is cost, if you can move to a digital landscape, you can theoretically save a lot of money. The problem is how do you save any costs? You can stop printing or delivering on all but the most profitable days, but the worry is you could kill the newspaper outright if you did that. There is potential for costs savings still out there. And as a No. 1 brand in a market, there is the potential to move quickly if you begin to sell digital advertising.

“Advertisers are as bewildered by all of this as news organizations are,” says Rosensteil so there is an opportunity to provide that consulting.

FANCHER: Has anyone studied what the news and information consumption experience is or ought to be.

ROSENSTEIL: They can see from trial and error what’s working. “Are people doing serious research on this beyond what they can collect in their own market?” They aren’t seeing it.

FANCHER: Is that a culture issue at the highest levels of the industry in that this is an industry that has never done much investment here (in market research)?

ROSENSTEIL: “There is a culture of risk aversion, replication and …. And looking to research gathered by somebody else … just looking at a few experiments that you try in your own business … the notion of fail early and often, as in Google, does not exist in the news industry because from about 1900 to 1989, this was an industry that was increasingly profitable year after year even after, at midpoint in those years, the audience started to shrink a little bit.”

FANCHER: Working collaboratively between industry and universities like this might be an area of opportunity?

ROSENSTEIL: “The industry lacks a lot of the competencies that it needs to move forward. Those competencies exist in the university, if they can be applied fast enough.” The problem is there is a perception that the university does not move fast enough.

FANCHER: “Well, them’s fightin’ words in these parts. We should have an interesting disussion.”

JURKOWITZ: This is an industry that is finally talking to each other a lot more than ever before. “Once we issued this report, we heard from a lot of people … .there is some degree the putting the brain power together, but it is still largely is that working for you will it work for me.”

FANCHER: Hard to move to an open and honest discussion. News and information professionals have been through a rough time – there is a fear factor.

Now turning to Cinnamon Melchor of the AKQA Digital Agency about culture. She works for a digital agency in San Francisco. (She is doing a later session about how the mobile space is changing communication).

MELCHOR: She is surprised at the flogging of the advertising staff.

General discussion about how do you deploy limited resources.

Next Mike Jenner, Houston Hart professor at Mizzou-RJI who has done research on revenue models in the industry.

JENNER: He sees there is now urgency in news organizations as they see their business burning. There is culture challenge. But if print is still the oxygen it is hard to say we’ll stop selling print. There’s a lot that can be done to help cross the bridge. Clayton Christiansen’s Innovators Dilemma talks about that. Ad staffs and publishers are having a hard time letting go of $10 bills and chasing $1 bills.

FANCHER: How do you deal, especially in the newsroom, with what is good enough? 

JENNER: We spend up the line up about as fast as we can speed it in most newsroom and I worry that we have cut it too deeply and I worry that these brand sthat still have magnetism for some reasons are not going to be worth monetizing any longer because they have lost so much. Good enough does not mean forget about verification or being adequate.

ESTHER THORSON: “Every time you cut your newsroom you cut your newsrooms … and that is the exactly last opposite to what the newspaper has done. … .that is not observable without doing the mathematics.” She says there are two key problems with the business end of the news industry --- one is no tradition of marketing decision making – doing important research, what does it mean and then testing. “Every industry in the world does that except the news industry,” she says. It needs management training so the industry can do management decision making. This is one of the types of needs that RJI is moving to promoting.

Concerning advertising: “It is just wrong to say to an advertiser I need to sell you some digital or print …. They need services that work for their business.” The sales staff has to match opportunities with advertiser needs. “Forget just saying, I have to sell digital . . .. they only way we sell product is integrated marketing communication and that means multiple media and not just what the newspaper is selling.”

FANCHER: Not turns to Jen Reeves to ask her about what’s happening with mobile and digital on broadcasting. He asks her about going to communities and training citizens to use new-media tools, but is she doing it with advertising staffs. And how do you scale it up.

REEVES: RJI-related newsrooms have been trying to hold training sessions. There is zero fear this year in an election year because there is so much revenue. Innovation happens when there is fear. And a challenge is how far should she as a journalist be pushing sales. “We have gone to our sales department ideas . . . and the move onto the next car dealership, and that’s reality.”

PADGET: The only group not to be flogged yet are the ad agencies. Print buyers are getting laid off. So the relationship news organizations have are often with the wrong buyers. Trying to get a meeting with a digital agency is really tough. You have been eclipsed by Google, Pinterest and Facebook. It involves learning how to sell from no-longer a position of dominance.

JURKOWITZ: Sometimes a factor in whether a person will innovate is how close they are to retiring. When they collected the cultural information from the companies, he talked to a professor at the Wharton School he said that’s what always happens in industries that are undergoing disruption. “Suddenly, you’ve been a steward of one of these companies and sudden you are being told your skills are not required anymore, your values are outmoded. And so there are very basic issues involved in how to make this transition.”

FANCHER: “It is amazing the clarifity that sets in once you retire.”

JOY MAYER: Asks if we can shift to a discussion about how to meet community information needs.

‘The future may not be in advertising’ – Rosensteil

ROSENSTEIL: Not sure if future revenues are as tied to advertising in the past. That may be the path to ruin, because Facebook and Google are moving into local space, with the ability to customize ads with engineering tools you don’t have. But there may be opportunities in the knowledge business that we haven’t thought of. Google and Facebook will be in the consumer knowledge business – they will sell intimate, personal knowledge about people in your community which wil lbe difficult to compete with. “So the future may not be in advertising,” says Rosensteil.

For information to have value it is going to have to answer some new question that hasn’t been answered. “We need to ask what is it that people don’t know that they need to know, tomorrow …. And what are the communities in our market that are not being served – maybe specialized markets, elite markets.” But he says the number of operations is shrinking.

JOY MAYER: Mayer is an editor at the Columbia Missourian and works leading a community engagement team. They are trying to listen to the community enough to learn what they want to know. They ask: “What do you wish the community knew more about.” She thinks of it as issue invitations to participate to the community. She shows people in the newsroom how it makes their job easier and celebrates success when she can demonstrate that it has helped the reporting process. She talks about the challenge of culling the ideas down to the ones she can feasible pursue, and letting the other great ideas go. Idea is to help one journalist do their job better each day.

FANCHER: How do we move from being tactical and analytical to being strategic?

MAYER: Maybe we should look at stories that get under 100 page views and no do them any more – an example of a ruthless decision.

FANCHER: If journalism didn’t exist today we wouldn’t invent it in the form that has been practiced for 100 years. How do we define news and what’s a story and what values we have.

Investment needed to get community to the table?

RUEBEN STERN: Works in the Futures Lab at RJI. They have been testing community engagement using KBIA as a test platform. We ask listeners to be part of a conversation, but we are still sending the old message of distance. We have to say we actually do want you to interact with us. It’s a whole different communication structure. “We’re finding that without investing seriously in that kind of infrastructure, they are not coming to the table.” Are they equipped to deliver communication back and forth via Twitter?

FANCHER: Asks Janet Coats (former editor of the Tampa Tribune) for her input.

JANET COATS: She has been working during her fellowship on networks, and on communities of practice – how people get together and use digital tools and in-person conversations to try and improve their practice. The digital age gives more ways to do that. She says her husband, Rusty Coats has been sending messages of concern about how the discussion has handled the business side. She says the small-market publishers understand that it is all about relationships. That’s the coin and trade. “Relationships – that’s not an algoritm …. We have to build and c ultivate those networks with intentionality . . . it’s what newspapers were supposed to be about and we dug a little hole and built a moat and went behind it and say be damned, we know what’s right and we have to get back to understanding we don’t know what’s right.”

JURKOWITZ: He worked as an ombudsman at The Boston Globe. There was an arrogance driven by the fact the industry could afford to be arrogant.

COATS: Our value is our listening skills. It is not the judgment it is the listening that we can bring to it. … we have also always listened episodically … .with digital tools, we can listen over a much greater range of time, we can see the shifts if we are listening with intention and not just to the noise … .where are there smart opinion leaders to be plugged into – listening over time and watching the shift in dialog and then doing something with that. Even the most decimated newsrooms remain the best repositories of community history.

FANCHER: What causes significant change is when you can change a paradigm. If you can understand where the resistance comes from then you can change. A lot of newsroom resistance is due to loyalty to the old way of doing things, the idea now to create loyalties to new systems and ways of doing things.

Focus on functions and values, not tools and procedures

ROSENSTEIL: Functions and values are enduring, but the procedures and tools we use need to change dramatically. We are in the creating knowledge business, not the business of writing narratives and selling ads. “We adhere to these procedures because we mistake them for something larger …. [changing] requires more intellectual rigor” to focus on the functions and values rather than the procedures and tools. “Allegiance to procedures …. Gets in the way of fulfilling our purpose.”

FANCHER: Seek truth, minimize harm, act independently. Sometimes transparency isn’t enough. It is very much understanding about why a citizens sees independence differently than a news room sees it. Other comments?

PADGETT: There is a noticeable absence of youth at newspaper conferences. At digital conferences. “When I went to the digital conferences I was by far the oldest and the whitest in the room,” she observes. There is a key digital executive who addressed a conference in a hoodie. So the important thing is getting that young thinking into the room.