journalism

It’s the Competitive Spirit, Stupid

 

Legacy media suffer from a deadly DNA mutation: they’ve lost  their appetite for competition; they no longer have the will to fight the hordes of new, hungry mutants emerging from the digital world. 

For this week’s column, my initial idea was to write about Obama’s high tech campaign. As in 2008, his digital team once again raised the bar on the use of data mining, micro-targeting, behavioral analysis, etc. As Barack Obama’s strategist David Axelrod suggested just a year ago in Bloomberg BusinessWeek, compared to what they were working on, the 2008 campaign technology looked prehistoric. Without a doubt, mastering the most sophisticated practices played a crucial role in Obama’s November 6th victory.

As I researched the subject, I decided against writing about it. This early after the election, it would have been difficult to produce more than a mere update to my August 2008 story, Learning from the Obama Internet Machine. But, OK. For those of you interested in the matter, here are a couple of resources I found this week: An interesting book by Sasha Issenberg, The Victory Lab, The Secret Science of  Winning Campaigns, definitely worth a read; or previously unknown tidbits in this Stanford lecture by Dan Siroker, an engineer who left Google to join the Obama campaign in 2008. (You can also feast on a Google search with terms like “obama campaign + data mining + microtargeting”.)

I switched subjects because something jumped at me: the contrast between a modern election campaign and the way traditional media cover it. If it could be summed up in a simplistic (and, sorry, too obvious) graph, it would look like this :

The 2012 Election campaign carries all the ingredients of the fiercest of competitions: concentrated in a short time span; fueled by incredible amounts of cash (thus able to get the best talent and technology money can buy); a workforce that is, by construction, the most motivated any manager can dream of, a dedicated staff led by charismatic stars of the trade; a binary outcome with a precise date and time (first Tuesday of November, every four years.) As if this was not enough, the two camps actually compete for a relatively small part of the electorate, the single digit percentage that will swing one way or the other.

At the other end of the spectrum, you have traditional media. Without falling into caricature, we can settle for the following descriptors: a significant pool of (aging) talent; a great sense of entitlement; a remote connection with the underlying economics of the business; a remarkably tolerance for mediocrity (unlike, say, pilots, or neurosurgeons); and, stemming from said tolerance, a symmetrical no-reward policy — perpetuated by unions and guilds that planted their nails in the media’s coffin.

My point: This low level of competitive metabolism has had a direct and negative impact on the economic performance of legacy media.

In countries, regions, or segments where newsrooms compete the most on a daily basis (on digital or print), business is doing just fine.

That is the case in Scandinavia which enjoys good and assertive journalism, with every media trying to beat the other in every possible way: investigation, access to sources, creative treatment, real-time coverage, innovations in digital platforms… The UK press is also intensively competitive — sometimes for the worse as shown in the News Corp phone hacking scandal. To some extent, German, Italian, Spanish media are also fighting for the news.

At the other end of the spectrum, the French press mostly gave up competing. The market is more or less distributed on the basis readers’ inclinations. The biggest difference manifests itself when a source decides to favor one media against the others. Reminding someone of the importance of competing, of sometimes taking a piece of news from someone else’s plate tends to be seen as ill-mannered, not done. The result is an accelerating drop in newspapers sales. Strangely enough, Nordic media will cooperate without hesitation when it comes to sharing industrial resources such as printing plants and distribution channels while being at each other’s throat when it comes to news gathering. By contrast, the French will fight over printing resources, but will cooperate when it’s time to get subsidies from the government or to fight Google.

Digital players do not suffer from such a cumbersome legacy. Building organizations from scratch, they hired younger staff and set up highly motivated newsrooms. Pure players such as Politico, Business Insider, TechCrunch and plenty of others are fighting in their beat, sometimes against smaller but sharper blogs. Their journalistic performance (although uneven) translates into measurable audience bursts that turn into advertising revenues.

Financial news also fall into that same category. Bloomberg, DowJones and Reuters are fighting for their market-mover status as well for the quality — and usefulness — of their reporting; subscriptions to their service depends on such performance. Hence the emergence of a “quantifiable motivation” for the staff. At Bloomberg — one of the most aggressive news machine in the world — reporters are provided financial incentives for their general performance and rewarded for exclusive information. Salaries and bonuses are high, so is the workload. But CVs are pouring in — a meaningful indicator.

Digital newsrooms are much more inclined to performance measurements than old ones. This should be seen as an advantage. As gross as it might sound to many journalists, media should seize the opportunity that comes with modernizing their publishing tools to revise their compensation policies. The main index should be “Are we doing better than the competition? Does X or Y contribute to our competitive edge?”. Aside from the editor’s judgement, new metrics will help. Ranking in search engines and aggregators; tweets, Facebook Likes; appearances on TV or radio shows; syndication (i.e. paid-for republication elsewhere)… All are credible indicators. No one should be afraid to use them to reward talent and commitment.

It’s high time to reshuffle the nucleotides and splice in competitive DNA strands, they do contribute to economic performance.

frederic.filloux@mondaynote.com

 

Transfer of Value

This is a story of pride vs. geekiness: Traditional newspapers that move online are about to lose the war against pure players and aggregators. Armed with the conviction their intellectual superiority makes them immune to digital modernity, newspapers neglected today’s internet driving forces: relying on technology to build audiences and the ability to coalesce a community over any range of subjects — even the most mundane ones.

When I discuss this with seasoned newsroom people on both sides of the Atlantic, most still firmly believe the quality of their work guarantees their survival against a techno-centric approach to digital contents.

I’m afraid they are wrong. Lethally so.

We are a facing a culture shock. On one side, legacy medias: Great franchises who grew on strong values, such as “pristine” journalism, independence, storytelling, fact-checking, solid editing, respect for the copyright… Along the way, they made their share of mistakes, but, overall, the result is great. After all, at the height of the Fourth Estate’s power, the population was better informed than today’s Facebook cherry-pickers.  Now, this (aging) fraternity faces a new generation of media people who build their fiefdom on a completely different set of values. For instance, the notion of copyright has become exceedingly elastic. A few months ago, Flipboard began to aggregate contents from French news organizations, taking large excerpts — roughly capturing the essence of a story — along with a token link back to the original content. Publishers sent polite letters saying, in substance: ‘Guys, although we are fond of your iOS applications, you can’t simply pick up our stuff without permission, we need to talk first…’

Publishers’ attitude toward aggregators has always been ambiguous. Google is the perfect example: on one hand, publishers complained about the search giant’s power; and, at the same time, they spend huge sums of money optimizing their sites, purchasing relevant keywords, all to make the best use of the very power they criticize. In Belgium, publishers challenged Google in court for the Google News product before realizing they really depended a lot on it, and begging for reintegration in the Google traffic cauldron.

Another example of the culture shock: reliance on technology. It’s a religion for the newcomers but merely a support function for traditional editors. Unfortunately, evidence shows how wrong it is to snub the traffic building arsenal. Here are a few examples.

On July 5th, The Wall Street Journal runs an editorial piece about Mitt Romney’s position on Obamacare.

The rather dull and generic “Romney’s Tax Confusion” title for this 1000 words article attracted a remarkable 938 comments.

But look at what the Huffington Post did: a 500 words treatment including a 300 words article, plus a 200 words excerpt of the WSJ opinion and a link back (completely useless). But, unlike the Journal, the HuffPo ran a much sexier headline :

A choice of words that takes in account all Search Engine Optimization (SEO) prerequisites, using high yield words such as “Squandering”, “Snafu”, in conjunction with much sought-after topics such as “Romney” and “Health Care”. Altogether, this guarantees a nice blip on Google’s radar — and a considerable audience : 7000+ comments (7x more than the original), 600 Facebook shares, etc.

HuffPo’s editors took no chance: the headline they picked is algorithm-designed to yield the best results in Google. The aggregator invested a lot in SEO tools: I was told that every headline is matched in realtime against Google most searched items right before being posted. If the editor’s choice scores low in SEO, the system suggests better terms. In some instances the HuffPo will A/B test headlines: It will serve different versions of a page to a couple of random groups and, after five minutes, the best headline will be selected. Found on Quora, here are explanations by Whitney Snyder, HuffPost’s senior news editor:

The A/B testing was custom built. We do not, however, A/B test every headline. We often use it to see if our readers are familiar with a person’s name (i.e. John Barrasso vs GOP Senator), or to play up two different aspects of a story and see which one interests readers more. We also A/B test different images.

Other examples below will prove the effectiveness of HuffPo’s approach. Here is a media story about a TV host whose position is in jeopardy; the Daily News version: a 500 words article that looks like this:

The Huffington Post summed it up in a 175 words form, but introduced it with a much more potent headline including strong, Google-friendly locutions:

Results speak for themselves:

Daily  News original version : 2 comments, 1 tweet, 1 Facebook share
HuffingtonPost version : 4601 comments, 79 tweets, 155 share.

Like no one else, the HuffPo masters eye-grabbing headline such as these :
Watch Out Swimmers: Testicle-Eating Fish Species Caught in US Lake (4,000 Facebook recommendations), or: Akron Restaurant Owner Dies After Serving Breakfast To Obama (3300 comments) or yesterday’s home: LEPAGE LOSES IT: IRS ‘THE NEW GESTAPO’ displayed in a 80 points font-size; this adaptation of the Maine’s daily Press Herald generated about 6000 comments on the aggregator.

The point is not to criticize the Huffington Post for being extremely efficient at optimizing its work. They invested a lot, they trained their people well. Of course, the bulk of HuffPo’s content  comes from : a) unpaid bloggers — 9,884 new ones last year alone according to Arianna’s count; b) content borrowed from others media and re-engineered by 170 journalists, a term that encompass various kinds of news producers and a bunch of true writers and editors; c) a small percentage of original reporting.  Each day, all this concurs to “over 1,000 stories published” that will translate into 1.4 million of Facebook referrals and 250,000 comments. Staggering numbers indeed. With some downsides, too: 16,000 comments (!) for an 200 words article about Barack Obama asking to turn off Fox News during a campaign tour is not likely to attract enviable demographics advertising-wise. The HuffPo might make a billion page views per month, but most of them only yield dimes.

The essence of what we’re seeing here is a transfer of value. Original stories are getting very little traffic due to the poor marketing tactics of old-fashion publishers. But once they are swallowed by the HuffPo’s clever traffic-generation machine, the same journalistic item will make tens or hundred  times better traffic-wise. Who is right?  Who can look to the better future in the digital world ? Is it the virtuous author carving language-smart headlines or the aggregator generating eye-gobbling phrases thanks to high tech tools?  Your guess. Maybe it’s time to wake-up.

frederic.filloux@mondaynote.com

Lessons from ProPublica

Paul Steiger is one of the men I admire the most in my profession. Five years ago, at the age of 65, and after a 16-year tenure as the Wall Street Journal’s managing editor, he seized the opportunity to create a new form of investigative journalism. Steiger created ProPublica, a non-profit newsroom dedicated to the public interest and to deep dive reporting. He hired a bunch of young staffers (coached by seasoned editors and reporters) that could help him lift data journalism and computer-assisted reporting to the highest level. Thanks to wisely managed partnerships, he gave ProPublica a wide audience and the quality and breadth of his newsroom’s reporting landed it scores of awards, including two Pulitzer Prizes. ProPublica was the first online news organization to receive such a seal of approval.

All this in five years, with now 33 journalists. Kudos.

Last wednesday, at the end of quick hop to New York, I paid Paul Steiger a visit. His corner office nests on the 23rd floor of Broadway, overlooking Wall Street’s canyons and Manhattan’s southern tip. At 70, Steiger has a twinkle in the eye that you don’t often find in reporters half his age. Especially when he speaks about ProPublica’s most shining journalistic moments.

In late 2006, the Sandler Foundation, approached Steiger with a wish to allocate a fraction of its immense wealth to the funding of investigative reporting. The newsman made four recommendations:

– The first one was to rely on a permanent staff as opposed to hired guns. “To do the kind of journalism we wanted to do, you must have people comfortable enough to stay on the story as long as needed. You also must accept dry holes. Freelancers will starve in such conditions!”

– Two, for the biggest stories, he wanted to partner with one or two large news organizations that could be granted some exclusivity over a short period of time in exchange for good visibility.

– Three, in order to guarantee the widest reach, Paul Steiger wanted to distribute the material freely on the web.

– Four, he would solely be responsible for content; funders or other contributors would not be involved in selecting stories. (Actually, on ProPublica’s first board meeting, none of the financial backers knew what the newsroom was working on.)

The partnership proved to be a great idea and expanded much farther than anticipated. It relied quite a lot on Paul Steiger’s and Stephen Engelberg’s personal connections (Engelberg is ProPublica’s editor-in-chief.) Quite often, Steiger explained, once a story neared completion, he’d place a call directly to a key editor in a major publications. “Sometimes, I could feel the excitement over the phone”, he laughs. He had to be very careful not to say too much before hammering the deal. I asked him how he handles confidential sources: “Well, we do not mind giving sources’ names to editors and lawyers, but less so to beat reporters… You know, reporters are human, and they might be tempted to call the sources themselves…”

Cooperation with other medias turned out to breed an unexpected advantage: transforming good national stories into a local ones. The best example, is the Dollars for Docs project. In a nutshell: a sizable portion of pharmaceutical firms operating in the United States are now required to reveal all direct contributions to doctors. (It’ll be 100% next year.) Needless to say, they complied reluctantly, providing a sloppy, almost useless database. As a result, the two reporters assigned to the subject were at a loss when it came to retrieve relevant data. Then, a young ProPublica in-house data specialist joined the team and solved the puzzle in a few weeks. The story was published by ProPublica’s five partners: The Chicago Tribune, The Boston Globe, PBS, NPR and Consumer Reports. Why Consumer Reports? “Because they had polling capabilities”, Steiger said. “Pharmaceuticals companies were saying patients didn’t mind if doctors got fees from them, we proved patients actually care…” After a few days for the key partners’ exclusivity window, the database was released on the web on October 19, 2010. In an easily searchable way, it showed the status of 17,000 doctors receiving a total of $750 million. A small stimulus to keep the flow of prescriptions smooth and steady — and to contribute to the indecent cost of healthcare in America.

Then the local mechanics kicked in. In the months afterwards, no less than 125 local outlets picked up the story, extracting relevant local information from the database and adding context. That’s one of the most interesting aspects of ProPublica’s work: its ability to cause a national interest story to percolate down to the local news organizations which, in turn, will give the story more depth by connecting it to its relevant community. (ProPublica now has 78 partners)

I asked Paul Steiger if he believes this model could be translated into a classic business. After all, why not gather half a dozen non-competiting news outlets, happy to split the price of large journalistic projects — each costing from $100,000 to $200,000 to produce — in addition to a small fee from local news? Paul Steiger says it cannot be made to work. To sum it up, by asking a newspaper or a TV network to pay, ProPublica would directly compete with their clients’ internal economics. Inevitably, someone will say, hey, last year, we paid x thousands dollars in fees for ProPublica’s stories, that’s the equivalent of y staffers. Not to mention the state of the news industry with, in fact, very few companies willing (and able) to pay extra editorial costs. The consequence would be a down spiral: deprived of the vast audience it now enjoys, the organization would have a hard time attracting clients for its content, nor would it be able to attract donations. Fact is, such syndication doesn’t work. California Watch, which operates on the same beat as ProPublica, burns more than $2 million a year but collects less than… $30,000 dollars in syndication fees.

That’s why ProPublica plans to stick to its original structure. Next year, Paul Steiger will step down as ProPublica’s editor-in-chief and chief executive, he’ll become executive chairman, a position in which he will spend most of his time raising money for the organization. As it stands today, ProPublica is on a sound path. The first two years of operation were solely funded by the Sandler family, for about $10 million a year. This year their contribution will be down to $4 million, with $6m coming from other sources. In 2013, the breakdown will be $3m and $7 million. Not only did ProPublica put itself at the forefront of the public interest, high quality, digitally boosted, modern journalism, but it also created a sustainable way to support it.

frederic.filloux@mondaynote.com

Culture Shift: User To Client

Fifteen years ago, Louis Gallois, the SNCF (French Railways) chairman decided to change the company’s lexicon: passengers were to be referred to as “customers” instead of the old bureaucratese “users” (in French: “clients” vs. “usagers”). The intent was to convey notions of choice and consideration for the rider. This being France, the edict led to convoluted debates. The upper management old guard held the company was on its way to betraying its traditional mission of service public. Unions—notoriously opposed to any forms of competition threatening their fiefdoms—saw the new word as a portent of evil mercantile designs. In Louis Gallois’s mind, a clientele should not be seen as captive herd but ought be shown respect and empathy. It took more than a decade to see the French railway system become more customer-oriented. The French Postal service underwent a similar transformation—largely under pressure from internet-based services. Today, when compared to most other countries, these companies have become good performers.

Back to my media beat, you see where I’m going: The transforming media industry is still stuck into a user’s culture. Media companies still believe this: One way or another, they own their readers (or viewers and listeners). Of course, this belief is not evenly shared among different corporate layers. In the C-suite, the comfy old view is long gone as numbers confirm, quarter after quarter, the industry’s slump. Most executives share a sense of vital urgency. But the deeper you dive into those companies, the more you see complacency still lurking.

As long as the old media culture still dominates and resists change, better business models won’t be able to gain traction.

It all boils down to a simple market place evolution.

In the pre-internet era, the media sector lived by its own rules: a captive audience left with no other choice but a bunch of well-entrenched media outlets. At the time, these companies didn’t feel the need to probe their audiences, let alone to market to them. People were listening, viewing, and reading, roughly at the same rate, year in and year out. Editors and publishers felt immune to any form of challenge. Newsrooms were a great place to be, filled with witty, smart people, most of them notoriously unproductive, but great to hang out with, caring very little care for the user’s state of mind.

Then, the digital wave unfurled. With it came a new business culture, completely antinomic to the legacy media’s thinking. At first, the tech/startup way of doing things was dismissed as a freakishly geeky and completely inapplicable to media organizations.

Then the two spheres—the new entrepreneurial culture and the old one— got closer and closer and began to intersect. The overlapping zone was, precisely, digital information. It began in chaotic but participatory (massively) and profuse ways. This led to the rise of “commodity news”—whose value evaporated in the process—at the expense of the original (and traditional) news sources that were slow to understand the scope of the upheaval. This put a brutal end to the widespread old complacency.

As the user morphs into a customer, s/he becomes more demanding of its media provider. There is a reason for that shift: a magazine subscriber is also an Amazon patron and s/he now expects the same level of service. Instead, for most magazines, it still takes 3-6 weeks for a monthly print subscription to start.

Today, the media industry must change its reference system. Every single day, traditional-media-in-transformation collides with companies (pure players, aggregators, portals, search engines, mobile applications, retailers, distributors) built on very different, opposed sometimes, values and principles. As a result, the competition on products (and audiences) leads to a competition on the processes of building and marketing these products.

This can be summed up to three notions.

The Customer (again).  He (she) is no longer a well-defined monolithic individual. Consider the structure of a digital audience: news consumption is scattered all over the day with different size and shapes. This should impact the way news is packaged. Most newsrooms are currently unable to adapt to the time-sensitive diversity that has become expected. Too many newsrooms don’t understand their output should be reformatted, re-edited, for different uses, at different times of the day, on different devices.

Competition / Speed => Leading the pack. The media business is now intensively competitive. Newsrooms should be obsessed with beating the competition in every possible way, exactly in the same fashion a tech company is constantly rolling-out new features for an application or a service. Unfortunately for the slowest and the weakest, the media industry is migrating to a “winner-takes-all” system, with very little oxygen left to the lower tier.

Responsibility / Empowerment / Focus => Better Execution. This implies two moves: First, a complete overhaul of the HR culture. The old media culture is plagued by poor accountability and dilution of responsibility. It’s time to shift to one project (or one segment of the business) = one Direct Responsible Individual, meaning true delegation, a clear mission, and the sanction (positive/negative) that goes with it. Two, it involves a change in the compensation structure, until then dominated by guild-management negotiated agreements that abhor genuine meritocracy. Again, the technosphere teaches us the benefits of the opposite: a human management system able to attract, retain and promote talented people. The combination of responsibility and reward (not only financial) is a non-negotiable requirement for better execution.

Before going back to spreadsheets and corporate dashboards, all the boxes above must be checked. Vaste programme.

frederic.filloux@mondaynote.com

Media Culture Shifts: theory vs. reality

This weekend, my ritual readings were dominated by corporate media culture issues: How to transition from the legacy media culture to the more agile and chaotic digital world? I’ve been reading up on this topic — and sometimes conferencing about it — for years. But, to my surprise, over time, I’ve been feeling lectured on those very issues. Sometimes irritatingly so. The last sermon was delivered early March by the Pew Research Center’s Project for Excellence in Journalism. The report –which I nevertheless recommend reading– reverberated over many other great online publications such as the Nieman Journalism Lab in a piece written by two journalism professors, Jonathan Groves and  Carrie Brown-Smith; their column is softly titled A call for leadership: Newspaper execs deserve the blame for not changing the culture.

For once, I’ll align myself with the blamed “Newspaper execs” and provide a perspective from this vantage point.

Since December 15, I’m in charge of digital operations for Groupe Les Echos which publishes the only remaining business newspaper in France. Together with a seasoned CEO and a team of managers in charge of business units and critical functions, we’re doing our best to put the company back on track.  All of us are here because we firmly believe in the strength of the company’s core products: a competent and highly specialized newsroom and a line-up of solid business-related products and services. The main idea is to revitalize everything, restore profitability, increase and secure market share and create an enviable working environment capable of attracting the talent required by our many fields of activity. That’s the plan.

I addition to this recent line in my resumé, thanks to numerous exchanges with foreign colleagues, my affiliation with several trade groups such as INMA or the Gobal Editors Networks has nurtured my reflection. We are all converging to a similar train of thoughts: morphing a legacy media business into a modern, digital-dominated company is a f*** (frighteningly) complicated endeavor.

Now I’m coming back to the lecturers of all stripes. When you look at their CVs, not a single one can claim any managing experience. They all have a remote view of what a P&L or a KPI is; they never had to fire someone or to agonize over picking up x vs. y to fill an open position; they never had to make a recommendation for investing several million dollars or euros in a project with an uncertain future. They probably never experienced failure and the ensuing humiliation and anguish. This doesn’t mean they’re not interesting (and sometime entertaining) to read, it simply says they propagate a theoretical and narrow view. In a way, some of their ‘‘obvious’’ prescriptions remind me of people who claim losing weight is easy: All you have to do is exercise more and eat less. Sure. But don’t tell me what, tell me how.

Let’s address a few items mentioned in the Pew Report.

First, the authors deplore the propensity of newspapers management to remain more print centric than prone to speeding up digital transition. There is a good reason for this. According to the survey:

The papers providing detailed data took in roughly $11 in print revenue for every $1 they attracted online in the last full year for which they had data. Thus, even though the total digital advertising revenues from those newspapers rose on average 19% in the last full year, that did not come anywhere close to making up for the dollars lost as a result of 9% declines in print advertising. The displacement ratio in the sample was a loss of dollars by about 7-to-1.

Then, of course, everyone is focused on increasing the $1 digital revenue, but it’s difficult to blame managers for not trying to slow down the decline of print activity that stills account for…92% of the revenue of the 38 newspapers surveyed by Pew.

Fact is, very few industries are suffering as the newspaper business does. According to the latest statistics released by the Newspaper Association of America the evolution in print ad revenue went like this:

2005 +1.5%
2006 -1.7%
2007 -9,4%
2008 -17.7%
2009 -28.6%
2010 -8.2%
2011 -9.2%

Since 2005, print advertising revenue has dropped by 56%. And the $20.6 billion it brought last year has to be compared with the $3.2 billion scored by digital operations. Overall, despite the growth of their digital business, American newspapers have lost 52% in revenue from advertising since 2005.

Such massive revenue depletion is supposed to call for serious restructuring — a move that, at the same time, has become increasingly less affordable. A couple of years ago, management at a French national newspaper briefly considered switching to 100% online, no more print. It made the following back-of-the-envelope calculation: of a €20 million investment for the switch, €15 million would have been swallowed by restructuring costs such as discontinuing print-related operations, buyouts etc. The manager quickly decided against even mentioning the idea to its owner.

Newspaper companies have to deal with the specificities of their workforce that complicates any strategic move. An aging staff, locked-in by layers of antiquated guild or union-negotiated contracts, doesn’t favor labor agility. The same goes for training, job reassignments, etc.

Those constraints, combined to a residual sense of entitlement within newsrooms, further complicate the transition. Regardless of upper management’s determination, you’ll never be able to steer a century-old company the way a young startup adjusts to changing circumstances, whether it’s explosive growth or adverse events.

As a result, management of a legacy media company is left with a dual agenda. On the one hand, going for the low hanging fruits, getting quick wins such as small, swiftly executed projects thanks to “agents of change” identified within the company. And, at the same time, setting deep culture-changes in motion.

One of the most compelling “culture statement” I’ve seen was designed three years ago by Reed Hastings, the CEO of Netflix, a company that rocked the streaming media sector like never before. Here is an excerpt of Hastings’ 126 slides presentation that I think deserves consideration:

– The “Behavior and skills” section is broke up into nine items “…Meaning we hire and promote people who demonstrate these nine:
1. Judgement
2. Communication: Listening others and articulating views
3. Impact: “You focus on great results rather than on process. You exhibit bias-to-action, and avoid analysis-paralysis”
4. Curiosity : “You learn rapidly and eagerly”, “You contribute effectively outside of your specialty”
5. Innovation: “You challenge prevailing assumptions when warranted, and suggest better approaches ”
6. Courage: “You say what you think even if it is controversial”, “You make tough decisions without agonizing”, “You take smart risks”
7. Passion: “You inspire others with your thirst for excellence”, “You celebrate wins”, “You are tenacious”
8. Honesty: “You are quick to admit mistakes”
9. Selflessness: “You are ego-less when searching for the best ideas.”

Other Netflix core values include:

– “Great Workplace [means working with] Stunning Colleagues : Great workplace is not espresso, lush benefits, sushi lunches, grand parties, or nice offices. We do some of these things, but only if they are efficient at attracting and retaining stunning colleagues.”

– “Corporate Team:  The more talent we have, the more we can accomplish, so our people assist each other all the time. Internal “cutthroat” or “sink or swim” behavior is rare and not tolerated.”

– “Hard Work = Not Relevant : We do care about accomplishing great work. Sustained B-level performance, despite “A for effort”, generates a generous severance package, with respect. Sustained A-level performance, despite minimal effort, is rewarded with more responsibility and great pay.”

– No room for what Hastings call “Brilliant Jerks“. His verdict:  “Cost to effective teamwork is too high.”

– About processes: “Process-focus Drives More Talent Out. Process Brings Seductively Strong Near-Term Outcome.  Then the Market Shifts… Market shifts due to new technology or competitors or business models. [Then] Company is unable to adapt quickly because the employees are extremely good at following the existing processes, and process adherence is the value system. Company generally grinds painfully into irrelevance.”

– “Good” versus “Bad” Process:
“Good” process helps talented people get more done.
- Letting others know when you are updating code
- Spend within budget each quarter so don’t have to coordinate every spending decision across departments.
- Regularly scheduled strategy and context meetings.”

“Bad” process tries to prevent recoverable mistakes:
- Get pre-approvals for $5k spending
- 3 people to sign off on banner ad creative
- Permission needed to hang a poster on a wall
- Multi-level approval process for projects
- Get 10 people to interview each candidate.”

And to conclude, I love this one about vacation policy and tracking days off:

” We realized… [that] We should focus on what people get done, not on how many days worked . Just as we don’t have an 9am-5pm workday policy, we don’t need a vacation policy.
No Vacation Policy Doesn’t Mean No Vacation.
Netflix leaders set good examples by taking big vacations – and coming back inspired to find big ideas.”

And my favorite, about “Expensing, Entertainement, Gift & Travel: Act in Netflix’s Best Interest (5 words long).”

“Act in Netflix’s Best Interest” Generally Means… Expense only what you would otherwise not spend, and is worthwhile for work. Travel as you would if it were your own money. Disclose non-trivial vendor gifts. Take from Netflix only when it is inefficient to not take, and inconsequential. “Taking” means, for example, printing personal documents at work or making personal calls on work phone: inconsequential and inefficient to avoid.”

I’ll stop here. I’m sure you get the point. I prefer rules as stated by Netflix’s battle-scarred chief rather than by unsoiled scholars.

frederic.filloux@mondaynote.com

My 2012 Watch List

When it comes to cracking the digital media code, 2011 involved more testing than learning. Media companies seem to be locked in a feverish search mode. Their sense of urgency is reinforced by the continuous depletion of worldwide fundamentals: digital advertising’s encephalogram remains flat (at best); and when audiences grow, revenues do not necessarily correlate. As for legacy media such as large quality newspapers which still draw 70-80% of their revenue from print, they are still caught in a double jeopardy: losing circulation plus looming downward price pressure on ads. We see an unforgiving mechanism at work: on mature markets such as Europe or North America, print media currently absorbs about 25% of ad spending while time spent on newspapers falls well below 10%. On digital media the balance is just the opposite: the web takes roughly 20% of ad investments for 25% of time spent; as for mobile devices, there is almost no ad money spent (<1%), but people spend about 10% of their time on their smartphones — and the growth is exponential.

Last year, we saw many efforts in the “right” direction—”right” being a rapidly redefined. Below is a subjective list of moves, trends, innovations, attempts that burgeoned in 2011 and are likely to become more sharply defined with this coming year.

#1 Paid-for news. Many are trying, but no one has cracked the code—yet. Part of the problem is we are in a model that’s just the opposite of one-size-fits-all. We are likely to witness the emergence of many different ways of charging readers for quality content. Variables in the equation are many and sometimes hard to quantify:

- National vs. local
- General news vs. specialized
- Typologies of contents
- Most Likely Prime time reading
- Most Likely Prime device use
- Target group structure.

Go figure a reliable business model with a so many factors in the formula…

Paywalls come in different flavors. The prize for complexity goes for the New York Times’ Digital Subscription Plan launched March 17. According to the Times, its crystal-clear equation can be summed-up as follow:

Once readers click on their 21st [in a 4 weeks period], they will have the option of buying one of three digital news packages — $15 every four weeks for access to the Web site and a mobile phone app (or $195 for a full year), $20 for Web access and an iPad app ($260 a year) or $35 for an all-access plan ($455 a year). All subscribers who take home delivery of the paper will have free and unlimited access across all Times digital platforms except, for now, e-readers like the Amazon Kindle and the Barnes & Noble Nook.

Weirdly enough, this overly complex and pricey scheme seems to work: by the end of Q3, the Times had harvested 324,000 paid digital subscribers. This has to be viewed in the context of a site getting 47 million Unique Visitors per month on average, and 33 million in the US alone. As for mobile access, 11 million iPhones apps and 3 million iPads have been downloaded.

To watch in 2012: how fast the NYT will recruit new paid digital subscribers. To get a good view of the key elements in NYT’s digital revenues, see Ken Doctor’s analysis in Newsonomics. Plus, after the sudden resignation of its CEO (Janet Robinson), the NYT might be entering a new era; she could be replaced by a predominantly digital person.

#2 The Web App Movement. The boldest move of the year was made by The Financial Times: in June, it unveiled a web app for iPad and iPhone, independent of Apple’s closed ecosystem. Among its many advantages, the web app allows the FT.com to foster a close relationship with all its customers. In five months, the FT.com has collected over 250,000 paying digital subscribers. Its entire digital operations now accounts for 30% of its revenue. (More on the FT.com’s economics in this PaidContent story.)

To watch in 2012: The outlook seems quite good for the FT.com. Its marketing division is working hard to tap into a huge database of 4 million registered users, including 1 million for the independent web app, half of them putting it on the home screen of their device.

#3 The Apple’s Newsstand is another item of the 2012 watch list. The project responded to publishers’ wish to see their prestigious titles rise over the crowd of garage apps, and to be able to propose long term subscription plans. In October, Apple came up with its digital kiosk, which is essentially a shortcut for publishers apps displayed in a wooden shelf. For good measure, Apple added an exclusive feature: automated downloading. In short, it is a success for magazines who register massive hikes in their digital sales, but much less so for dailies which remain a bit shy. (We been through this in a previous Monday Note)

==> To watch in 2012: the key issue for a massive move to Apple’s Newsstand remains customer data. Either Apple and the publishers will be able to work out a scheme in which about 70% of the customers will agree to provide their coordinates (see Apple’s Newsstand: Wait for 2.0), or the independent web app movement (FT.com-like) is likely to gain traction.

#4 The switch to Digital Editions, as opposed to dumb PDF, might play a critical role in the development of tangible revenue for the industry. Here, I spoke highly of great examples of tablet-specific applications such as BloombergBusinessWeek+ or the Guardian’s iPad version.

To watch in 2012: the adoption of Digital Editions will depend on three factors: 1) The publisher’s willingness to invest significantly on projects not profitable in the short-term, 2) The advertising community’s ability to understand that digital editions will bring their clients much higher benefits than PDF versions or even web sites will do, 3) The acceptance by various Audit Bureaus of Circulation that reader engagement is incomparably higher for designed-for-tablets editions (for more on the subject, read our recent column Unaccounted For Readers.) If these three items are checked, 2012 is likely to be The Year of Digital Editions.

#5 The Huffington Post contagion. Its acquisition by AOL for $315m has propelled the HuffPo to new highs. The content—largely based on unabashed aggregation and legions of unpaid bloggers—remains mediocre, but no ones really seems to care. As in the pre-bubble era, only eyeballs and hype count. The HuffPo has plenty of both. (OK, when you look at the numbers, as Ken Doctor did in this piece, you’ll see a HuffPo visitor brings 3.5 times less money than the NYT does…).

To watch in 2012: This is the year where the Huffington Post will go legit. Everyone is now kissing Arianna’s ring. Including large media company, such as Le Monde, ElPais, DieZeit and a couple of others in Europe that will help Arianna to go global. As appetizing as an alliance between Alain Ducasse and McDonald’s. Sometimes the search for strategy goes haywire…

frederic.filloux@mondaynote.com

The Best of Curation

I love talking about the things I enjoy using. The emerging ecosystem in which a bunch of smart people curate long form journalism is definitely one of those things. The companies are called Instapaper, Longreads, Longform. I love the material they find for me and I’m in the debt of developers who wrote neat applications that help me manage my very own library of great stories.

My reading selection process for long articles (say above 2500 words) goes like this. It starts with installing the Read Later bookmarklet, developed by Instapaper, on all my internet browsers. When I stumble on something I have no time to dive into, I hit the ReadLater tab in the by browser’s bookmarks bar (below):

This causes the piece to be stored in the cloud. (There is another service/app of the same kind called Read it Later. I just got it this weekend and haven’t had much time to use it yet.)

Then, I loaded the Instapaper app on my iPhone and my iPad, it works just fine. The stories I don’t have time to read at work are now available on my two nomad devices for my daily commute, my chronic insomnia, after-dinner relaxation or long flights. Unsurprisingly, topics center around business stories, medias, tech; but they also extend to neurosciences, and in-depth profiles of creative people in a wide range of fields. In doing so, I have re-created my own serendipitous environment; as I open the app, I always find something interesting I put aside a couple of weeks earlier.

My second source of good stories is the Editor’s Pick on three long forms curation sites. Instapaper has it own Browse section and my two favorites are Longreads and Longform. There are two other such sites I use less often: The Browser and Give Me Something to Read. They’re all built on the same idea: a self-organized community of thousands people (see graph below) who pick up articles they like and put them on Twitter (and also on Facebook and Tumblr); the feeds are then re-aggregated and curated by the sites’ editors. The process looks like this :

This system combines the best of Twitter (gathering a community that selects relevant contents) with the final responsibility of human editors. Just as important, Read Later and Read It Later rely on hundreds of third party applications that use their APIs (a piece of code that allows apps to talk to each other).

Then two questions arise :
– Does this model benefit publishers ?
– What kind of business models can the aggregators hope for ?

To the first question, the answer is yes and no. From their respective sites, these companies play a referrer role as they send traffic back to the original publishers. But when it comes to apps for smartphones or mobiles, these services become value killers: their content is displayed in the apps without advertising. See screenshots from the iPhone Instapaper app below:

As for Read it Later application, it proposes (below) a web view and a reformatted text-view. No need to be a certified ergonomist to guess which one will be used the most:

For good measure, let’s say Apple is not the last entity to add features that kill value by removing ads; below the same NYT web page in normal and “Reader” mode:

For now, publishers don’t seem to care much about this type of value hijacking. The rationale is such apps are still limited to early adopters. In a study released last week, Read it Later said it recorded a total of 47 million “saves” between May and October 2011 (and 36% growth between the first and the last month.) Weirdly enough, most of the “saves” recorded involve tech-related stories from blogs such as LifeHacker, Gizmodo (both are part of Gawker Media) or TechCrunch. Long form journalism appears too small to be accounted for. Equally weird, when Read it Later gives a closer look at data coming from the New York Times, we see this:

Great writers indeed, but hardly long form journalism. We would have expected a predominance of long feature stories, we get columnists and tech writers instead.

Similarly, Longreads.com gets about 100,000 unique visitors a month, founder Mark Armstrong told me. For this last week, publishers altogether got 21,230 referrals form Longreads’ curated picks. Despite this modest volume, Longreads’ 40,000+ community of referrers is growing rapidly at the rate of a thousand every two weeks or so.

Let’s talk business model. The Longreads team includes former McCann Erickson creative director Joyce King Thomas (story in AdAge here). She seems more interested in good journalism rather than in loading the elegant Longreads with a Christmas tree of ads. In short, Longreads’ business future lies more in a membership system than in anything else — maybe some sponsorship, Armstrong acknowledges. The contents Longreads promotes through its links addresses a solvent audience, one that knows great journalism comes with a price and so do good tools to mine it. It shouldn’t be a problem to extract €10 or $20 a year, directly or via an app.

Having said that, I remain a bit skeptical of Longreads’ avoidance (for now) of the classic startup venture capital mechanism. Because barriers to entry into its type of business are low, Longreads ought to quickly build on its momentum and on the undisputed quality of its product. This means promotion and also technology to extend the reach of the service and to secure control of the distribution channel–and to make it more mainstream.

frederic.filloux@mondaynote.com

The Blogosphere’s Soft Corruption

The TechCrunch / Arrington saga is the perfect illustration for the stealthy corruption plaguing digital information. Skip this paragraph if you know the story. In a nutshell: on September 1st,  Michael Arrington, founder of the site TechCrunch, announced the launch of a venture fund (Fortune broke the story). Rather small token by Silicon Valley standards: $20 million (to put things in perspective, according to the National Venture Capital Association, 37 funds raised a total of $2.7 billion in Q2 2011, which gives an average of $72 million per fund). No big deal, except Arrington is also TechCrunch’s editor and he intends to continue writing about startups — startups his venture would fund. (To make things even weirder, one of the main contributors to the fund is AOL, TechCrunch’s owner since last year).

Even the most twisted ethicist would have detected a looming conflict of interest. Not Arrington. Because he is one of most arrogant pricks in this business. And because he lives elsewhere. He resides in the blogosphere, where the simplest ethical issues are distorted like space-time at the edge of the universe.
Back on Earth, a controversy erupted. The loudest shot was fired by Kara Swisher, the co-executive editor (along with Walter Mossberg) of All Things Digital, the Wall Street Journal Digital Technology site.

I can’t help but sharing with you the first graf of her 6:00am (Pacific) outburst:

Of course I have something to say about the news yesterday that AOL would be a key investor in a new early-stage venture fund being started by TechCrunch’s perpetually petulant editor Michael Arrington — with a big, fat and decidedly greasy assist from a panoply of Silicon Valley’s most powerful VC firms and angel investors.

As Alfred Hitchcock said, it starts with an earthquake and it’s getting worse. Then, she summed up :

In fact, the creation of a $20 million investment kitty that Arrington has dubbed CrunchFund is simply the formalization of a long-standing arrangement that has already been going on since he founded his popular tech blog.

Eventually, after a public, web-enhanced, dispute with his owner, Michael Arrington was fired. (On the matter, New York Times’ media columnist David Carr wrote the best piece, as usual, well-crafted and documented).

Now, here is why I find this subject interesting. Three things: the revolving door between journalism and industry; the blogosphere distortion field; the pervasive conflict of interest.

The switch. For one, I have nothing against switching from journalism to another kind of activity. In that respect, I disagree with most of my fellow journalists – especially those in France who like to believe journalism is an apostolate (both come with a vow of poverty.) Last week, I met a former London-based business reporter, who is now back in France; he is being offered a top communication job in a Fortune 500 company. He feared being marked with the seal of infamy and no longer allowed to come back as a journalist. I told him things have changed; after five years or so as a communication guy for a large conglomerate, a business news organization would be even more interested in hiring him because he would know his sector pretty well, and would be able to detect all the manipulation tricks of big corporate PR machines, which could be invaluable to his junior co-workers.

As for someone writing about startups, I find it perfectly understandable the desire to cross the Rubicon and to join or create a venture fund. Trying to detect what could be a great product or even the Next Big Thing, nurturing great teams of engineers, designers or marketers, is an enthralling occupation, which, in addition, is both intellectually stimulating and financially rewarding.

Unfortunately, Arrington doesn’t see things that way. He got drunk in a kind of power game, intoxicated with his supposed “make or break” power over startups. (By the way, I always found the alleged power of tech writers over the fate of a startup to be vastly overstated; unlike in the analog era, the disintermediated world allows every product to find its path to success – as long as it deserves one.)  Anyway: I do find the revolving door is a good thing. As long as the previous door has been properly locked.

Enter the blogosphere and its tolerance for conflicts of interest and — let’s use the word – soft corruption.

Ten years ago, Arrington’s case would have been a no-brainer. Neither for him or his employer. He would have simply been let go. Now, it seems to trigger a quarrel between Ancient and Modern, the former being – obviously – representatives of the old medias, the likes of the Swishers and the (David) Carrs and the latter being the tech blogosphere and is elastic value-system. Fine.

I’m not going to denigrate the blogosphere as a whole or TechCrunch itself, which harbors good reporters. Blogs are part of my daily media routine and, for the record, I’ll say many bloggers do a better job than presumed professional writers. Still, by construction, bloggers are more prone to serve third party agendas: many are penniless, young, untrained, unsupervised and their writing is unedited. A target of choice for manipulation.

A couple of years ago, I witness firsthand the blogosphere’s vulnerability. I was called by a non-profit organization to take a look at their digital strategy (I can’t be too specific, I’m still under NDA). The whole things was in the hands of a couple of communication agencies, which had detected a gold mine, loading the project with outrageously overpriced services. I pissed them off quite a bit by donning a bean-counter’s suit — which I found, in that case, enjoyable – and by suggesting many budget cuts. (When done, I quickly moved away from that fishy mission).
One of the promotional tools proposed by the flacks, was dubbed as “The Blogger Army”. In short, a few hundred bloggers worldwide, presented as “influencers” that would convey pre-packaged messages concocted by the communication agencies. The bloggers didn’t have to care about the product or its underlying value, they just had to cut and paste the material they were provided with. All of the above for a $100,000 budget paid to a firm specialized in deploying the “army” — including a couple of well-know “influencers”.
That very same year, as I dug a bit further, I realized how many bloggers are deluged with gifts from the tech industry and how, to that crowd, the notion of flashing a Visa card to pay for gadgetry was seen as utterly ridiculous…

In the information business, the conflict of interest is looming at every corner. All the time, someone is trying to buy you with something. It could be a product, “exclusive” access, the transcript of legal depositions, a heads-up to a report. Everything. The more vulnerable (or hungry, or ambitious) a writer is, the better target he’ll be for the corrupters. Years ago, as I was writing about Hollywood, a writer from The Los Angeles Times explained how an interview with an agent or a movie producer often ended up with a cajoling “… And what about you my friend, you must have a script buried somewhere, hmmm? Let’s discuss it someday…”

That’s why, when it comes to get an credible review of a tech product or service, I’ll trust Walt Mossberg’s Personal Technology column much more than any blogger.  Mossberg is a seasoned professional (he’s 63) who had developed his craft well before the tech boom. He actually sharpened his claws covering the brutal automobile industry, as recounted is this 2004 Wired profile. Mossberg lives by his reputation of independence, that’s why the Wall Street Journal (and AllThingsD) consider him as an important asset – and pays him accordingly. I took him as an example because I’ve been reading his column since he started it in 1991 (I was then living in New York).

His 1000 words ethics statement is an example of what should be the standard in journalism. Many news organizations, newspapers, magazines, websites, have adopted similar codes. Are they foolproof? No, certainly not. But it is worth considering having one.

frederic.filloux@mondaynote.com

Politico’s Way

To cover American politics, Politico deploys an editorial staff of 150. This is more than any news organization in the United States for the same beat. It all started five years ago: a niche website launched by three seasoned political reporters who sharpened their claws in mainstream medias. As envisioned by John Harris, Jim VandeHei and Mike Allen, Politico was to start with a kernel of 12 hardcore political reporters who would aggressively run after all the balls.

Four years later, as a new presidential campaign gears up, Politico owns the news cycle, from 4:30am to midnight, on all vectors: web, mobile, television and… print. And it does so in rapid-fire mode.

Last week, I chatted with Bill Nichols, Politico’s managing editor. Before Politico, he spent 24 years at USA Today. There, among the many items on his impressive résumé, he covered six presidential campaigns as well as the State Department. Bill was in Paris to deliver the inaugural lecture at the Journalism School of Sciences-Po where I happen to have a gig (highlight of the lecture summed up in French on Slate.fr). His talk provided the students with a great start for their year; they were listening to a fifty-plus journalist who didn’t hesitate to leave the comfort of a great newspaper to jump into the unknown. Even in 2007, going after the Washington media establishment with a website was quite a bold move. Today, Nichols is obviously having a lot of fun — which is the best message to convey to a crowd of aspiring journalists.

The lessons to draw from Politico’s success are connected journalistic and business ones.

Politico has literally sliced and diced the news cycle with an array of dedicated products fitting all possible subjects, reading time and formats. Anyone serious in politics or government affairs will begin his day with a peek at the mobile version of the Politico Playbook. Described as ” Must-read briefing on what’s driving the day in Washington”, it is written by Mike Allen, the chief White House correspondent. The site features eight other “tip sheets”:

  • Huddle A play-by-play preview of the day’s congressional news
  • Pulse The latest in health care policy every weekday morning
  • Morning Money Political intelligence on the intersection of D.C. and Wall Street
  • Morning Score A pre-dawn guide to the permanent campaign
  • Morning Tech Daily download of technology news from D.C. and Silicon Valley
  • Morning Defense A daily briefing from inside D.C.’s national security apparatus
  • Morning Energy The one-stop source for energy and environment news
  • Influence Intelligence and analysis on lobbying

The idea is to hook the reader on the day’s “must-follow” items. Then, developing stories will be made available in all possible forms: stream of stories as the news dictate, a great deal of support through countless TV appearances (Politico maintains its own studio linked to all networks and all reporters are required to promote their work). Many times a day, breaking news, alerts, warnings are pushed on mobile. Then, to maximize the impact, top stories will be re-edited to feed the eponymous daily. It is published five days a week, only when congress in in session, and its 34,000 (free) copies are distributed at various strategic spots in DC.

Then, the Politico tone. As Bill Nichols acknowledges, Politico’s pitch is slightly more tabloidish than mainstream media. It doesn’t pontificate, nor does it endlessly circle around a subject. It reflects internal newsroom discussions and the talk of the town.  A few days ago, recounts Nichols, the editorial staff was discussing Republican Texas governor Rick Perry’s intellectual ability to run for the presidency; instead of going for a convoluted story loaded with nuances, Politico went straight with this headline: Is Rick Perry Dumb? This treatment was later supplemented by an informative 1600 words piece about Perry’s 2010 book “Fed Up!”, itself a great gift to his opponents. (To nail it, Politico published a Nine questions for Perry article listing subjects the candidate will have hard time eluding.)

That’s Politico’s way: aggressive, relentless, fun, witty, but also dedicated to providing in-depth, well-reported journalism. Last year, the New York Observer ran an interesting story on how The Atlantic (great magazine, along with an equally great site) was fighting back Politico on the Washington scene. David Bradley, owner of Atlantic Media company, had this comment:

“It was much happier to do what we were doing until Politico arrived in the world. Politico introduced a whole new standard of, I wouldn’t say quality, but I would say velocity and metabolism. I responded way too slowly. (…) They are going to be at the more racy, tabloid end of the spectrum. That seems to be the position they have chosen. I think we’ll be more of the authoritative end.”

To which Jim VandeHei retorted

“People come to us because we break news, we are authoritative and we help readers understand how Washington really works. I think Bradley’s description is clearly motivated by business interests. That said, we take all competitors seriously.”

Business is important as well to Politico and its powerful backer, the Allbritton family. As a privately held company it does not disclose financial data. Even with its large staff of 200 in total, it is said to be profitable thanks to its multi-pronged product strategy:

–The web site had an audience of 4 million unique visitors last July, according to Comscore (it should triple during the 2012 campaign). This is rather small compared behemoth such as the Huffington Post or the NYTimes that are more into the 50 million UVs range. But the value extracted from each visitor is quite high.

– Around half of its revenue is coming from the newspaper which sells high premium ads. Thanks to the geographical concentration of the Washington elite, the paper does not cost too much to distribute and its pagination and printing costs are adjusted to the advertising load.

– Last November, Politico launched “Politico Pro”, an in-depth paid-for service focusing on three critical (and lobbying-intensive) issues: energy, technology and healthcare. The price is $2,500 per month (story in the Columbia Journalism Review). “Pro” relies on several dozens of reporters and editors integrated with the rest of the newsroom.

– Recently, Politico added an event department: get-togethers for the Happy Few with big political names, moderated by staffers. The guests don’t pay, but big sponsors do — happily it seems. Events will be organized not only in Washington but on the campaign trail as well.

– Last June, Politico announced an e-Book venture with Random House. The concept: quick accounts, 20,000 to 30,000 words (80-120 pages), of the 2012 campaign. Produced at little additional cost, promoted by the brand, these could be pure gravy.

Politico’s potential revenue pool is huge. According to the Center for Responsive  Politics, the 13,000 registered lobbyists in Washington spent $3.51 billion (!!) in 2010. This is an affluent market, highly concentrated, both geographically and interests wise.

On the surface, Politico’s method of squeezing money from every slice of its market looks logical and reproducible. But its unique ecosystem makes Politico’s success difficult to replicate elsewhere.

frederic.filloux@mondaynote.com

It’s all about accountability

Compared to Anglo-Saxon journalism standards, French practices are regrettably lax. It doesn’t mean that France doesn’t have remarkable writers, editors or medias; but, too often, their practices are just sloppy. Here, journalists abuse anonymous quotes and are too cozy with their sources. Papers are insufficiently edited, reporters routinely go after a story with a pre-defined agenda – they know what they want to write and will twist facts, quotes and background accordingly.

In France, stories are never corrected. Or corrections can be used to further drill a point . If someone dares to exercise his legal “Droit de réponse” (the right to force the paper to publish a response to erroneous statements), he risks retribution. In 1984, as I was writing for Le Monde, some politician felt misrepresented and demanded a correction. My editor reacted:” Okay, we’ll publish his response. But we’ll append a “Six-bracket” that will make him cry…” He was referring to a small piece (typeface size: 6) appended below the response that usually blasts the righteous individual… That was my introduction to the ritual.

For the record, I’m not by any means putting myself above the crowd. I made my share of mistakes, I’ve not always acted in good faith and more… And, in management positions, I failed to go after the behaviors I just criticized – mostly by not hiring people eager to improve journalistic standards. The mistakes I made during my career still haunt me; we’ll see which ones resurface in this Monday Note’s Comments section…

The chain of command plays a key role in this collective failure, standards are set at the top. I know a couple of editors who encourage their reporters not to bother collecting the other side’s view on facts, as contradiction would impair the “mission”.
French editors have issued stupid rules such as the “journalism stops at the bedroom’s door”; read: beyond, it’s just muckraking. Sure thing. Except it encouraged the press to turn a blind eye on François Mitterrand’s morganatic family living in an opulent government-owned building and protected by a squad of dedicated gendarmes with their own rules. Or, until recently, French media chose to ignore that Dominique Strauss-Kahn was more a predator than a seducer. (Never wondered why DSK never go after female foreign correspondents? It’s because he knew they’d have reported any misbehavior, as opposed to France where her peers and her superiors will ask a harassed woman reporter to shut up). As for investigative reporting, it went down the drain a long time ago as police, magistrates and lawyers became extremely proficient at manipulating complacent reporters.

In 2009, Francois Dufour, the publisher and editor-in-chief of a successful set of publications for young readers (Mon Quotidien, see story in the New York Times), wrote a funny book titled: Are French Journalists Bad? (Les journalistes français sont-ils mauvais?) He didn’t answer the question directly, but the facts he presented were compelling.
French journalists are not genetically worse than others; it’s their culture, they are simply poorly trained and managed.
That year, I found myself involved in a debate with Dufour along with other journalists who had joined the cyber-zealots crowd. There, I got my first exposure to the “Permanent  correction” concept and to the “Publish first, check later and correct (PFCLC)” notion. Dufour and I took the same side, saying the ability to correct a story should not be a license to a kind of permanent approximation. After all, all-news medias have been around since the eighties; they always had the ability to permanently correct stories, but – even though they were far from perfect – they refrained from abusing the  PFCLC thing. (I don’t recall seeing a 7:00am news item airing rumors, unverified facts – at least to the best of the reporters’ ability – and issuing a correction an hour later).

The debate about the management of facts at “digital speed” is spurred by two important factors: the Distribution of responsibilities and the Merchant relationship.

1/  Along with social media comes the notion of distributed responsibility. As everyone reports what’s happening, no one will carry the full responsibility for it. In the event of a breaking or a developing news, when hundreds of people congregate around a Twitter feed hashtag, they don’t have – by definition – the safety net of someone with the role of deciding whether or not to publish (by asking basic questions, for instance). When everyone is in empowered to feed the echo chamber (sometimes with a pseudonym), no one is responsible.

2 / The absence of a merchant relationship also plays a significant role in the dilution of responsibility. In the digital cauldron, free is too often associated with a permission to be sloppy. A compulsive tweeter or blogger, propagating whatever s/he is able to grab, without any commercial relationship with readers, will feel no obligation whatsoever to quality. Being first becomes the main goal.
That is exactly the opposite for a newspaper, an online news organization, a TV or a radio network. Such organizations will (at least in theory) feel the obligation to respond to the trust that people are paying for – directly in the case of a paid-for service, or indirectly though advertising.

In the end, this is a matter of accountability. Having an entity, embodied by a group of people (an identifiable set of writers or editors), accountable for what is published or aired, is the best guarantee of acceptable standards. In the best cases, this accountability will apply to direct reporting. Or accountability will play a a key role in curating, in assessing the validity of third party contents coming from places unreachable by professionals.
One last thing, again, for the record. I was among the millions of people literally glued to live-blogging or Twitter feeds during major news events such as the Fukushima disaster, the Arab revolutions or the (less important) DSK affair. Therefore I’m NOT advocating some kind of regulation of the digital flow. For society, I’m still convinced its advantages far outweigh its drawbacks.

frederic.filloux@mondaynote.com