Cashing in on stolen contents

For publishers: How much money is lost because of stolen contents? Of that, how much can be realistically reclaimed? Before getting into numbers, an overview.

In recent weeks, I’ve gained a first-hand media perspective on anti-piracy technology. The technology is Attributor’s, and the media is Agence France-Presse, one of the big three global newswires along with AP and Reuters. (Disclosure: I produced recently a 15,000 words report for AFP covering its strategy and its future. I’m no longer working for AFP but I keep close links with this news company).

Every day, AFP sends about 400 news items to Attributor – a fraction of its daily production. These items are then matched against a set of web sites, both subscribers and non subscribers of the newswire’s services. Using a simple interface, Attributor ranks the sites by their propensity to reuse contents. For regular clients, the system shows how stories are used, what percentage is utilized and if they are properly credited or even linked. For non-clients if offers a great way to track down stolen content and to make the distinction between minor abuses, honest mistakes and systematic infringement, since the data are viewed from statistical and time-related angles.

For obvious reasons, I can’t disclose the medias I’ve been reviewing in detail. Let’s simply say that results are stunning. AFP material is widespread. To make it short, there are three types of abuses of copyrighted material.

- The first one is insufficient attribution by a client. Typically, a journalist puts his or her byline on a story largely taken from a newswire. On most cases, the byline will be reduced to initials along with “avec agence” (with newswire) mention, like this one for instance where the borrowed text form AFP is automatically highlighted….

For this piece, we can safely say that “M.D.’s” input was minimal and it would have been nicer to simply put the mention “AFP” at the bottom of this cut & paste performance. (It that particular case, the newswire story is itself an explicit recycling of a scoop by Le Figaro, a typical illustration of the Internet’s endless content loop). From a legal perspective, there is no particular issue. It’s only an ethical matter.

Another case involves misuse of contents by bloggers. In most case, bloggers have no clues about the meaning and use of copyright. And big medias who host them don’t really help. Typically, a young an passionate blogger “covering” his beat will simply take in good faith an entire AFP (or AP or Reuters) story and paste it on his blog, this time with a proper attribution. Except that he has no right whatsoever to do so. I’ve seen one big French site, whose boss loathes the AFP, ending up with 60% of its content illegally “borrowed” from the AFP (confronted with facts, the site has made serious efforts to correct the situation). Hypocritically, many sites shield themselves behind the fine print of the term of services buried deep in their site reminding bloggers not to steal copyrighted content. Fact is, most of them, including big medias, do not properly educate their legally challenged blogging contributors. More

Young readers: already hooked on subsidies

I love my country. Among many things, I enjoy its business attitude. In the media sector, it is an unabashed mixture of entrepreneurship, bold risk-taking and fearless independence. You can’t spend a week here without someone telling you : “Hey, you know what? We’re about to send some of our journalists, paid by the Ministry of Foreign Affairs, to train bloggers in Middle East. Isn’t that great ?” (Yeah, indeed — you just received a €14,000 invoice from the state health insurance administration, they recalculated the cost of your health coverage for the past year).
Another one: “We are going to launch a new version of our mega-site, built on CMS x.” (The guy mentions an horrendously expensive proprietary Content Management System)”. You ask : “… Huh, why not using free tools, instead? You hire a couple of engineers, create your own specs, schedule a year of successive upgrades, and you’ll get great results, no?”. The answer is ironclad: “Bah, it’s all government money, you know…  It is part of the Press Modernization Fund… And we’ll even be able to finance the iPhone App from the same moneybag…”

As we speak, there is a big debate at the newly created Syndicat de la Presse Indépendante en Ligne (Spiil). This professional body of online news publishers, is pondering whether to accept subsidies. Pragmatists say big medias have been taking subsidies for decades. Now, the big guys spend huge sums of public money to upgrade their sites and they compete with us. Purists disagree: No way, we are not going to replicate the old MSM (Main Stream Media) behavior. Well, most of those pure players are struggling to balance their P&L while doing good journalism. Now way, I’ll lecture them one way or the other.

Yep, I love France’s profligate attempts to keep its press alive. No country spends more money to preserve the freedom and the plurality of its press: €1.2bn in 2008 (taking into account all forms of aid); that is 12% of the sector’s total revenue. (Just picture the US government coughing up about $8-10bn a year to help its newspapers and magazines industry!). And the percentage is likely to go up: new programs were announced this year (see Media acquisition, the French way) and press revenues are eroding. Between 2003 and 2007, French subsidies rose by 71% versus +21% in Sweden. For added perspective, Swedish readership is three times higher than in France and, as a result, proportionally five times less subsidized. More

The Death of the MSM

You probably heard of Fake Steve Jobs, Dan Lyons, the former Forbes writer. He’s built a justified reputation for using his blog to do a kind of Steve Jobs pastiche, by turns analytical, satirical, occasionally vulgar and, yes, insulting every possible target in the Valley and in the MSM (Mainstream Media).

You’ll recall I criticized the New York Times’ bosses and one of their writers, Brad Stone, in a July 2009 Monday Note titled “Brilliant insights at the NYT”. In it, as a NYT fan, I worried about the quality of reporting, concerned with the superficiality of Silicon Valley coverage, bemoaning the formulaic cut-and-past jog of quoting anal-ysts and other “usual suspects”.

Well, read this Fake Steve Jobs piece. There, Dan Lyons gives another example of the MSM missing key information, the OfferPal scams, and insights, how game companies “game” users and how social networks can put an end to such practices. For short, the scammers are companies such as OfferPal tempting on-line game users with offers for more weapons or more lives while sending a stealth tentacle into their wallets by tricking them into expensive subscription “deals”.
The NYT’s problem is it wrote a fairly positive article on the new Virtual Goods Economy while totally missing the ongoing scams controversy. See Silicon Watcher’s overview here.

Fake Steve Jobs is worth adding to your list of RSS feeds (Google Reader is a good way to manage those). Lately, Dan Lyons wrote another tart and insightful analysis of big company (IBM in this case) PR practices here. Enjoy! —

The hype(r) local digital journalism

Everybody wants to go local. Internet-wise, it sounds like the new flavor of the month week. Going local is a digital and idealistic version of Mao Zedong’s “hundred flowers blossom”. (The Chinese dictator did actually encourage the expression of dissenting opinions; this turned out to have unpleasant consequences for those who took Dear Leader to his word). So, fine. Let’s see thousands of European and US cities generate a flurry of local websites covering city councils, local controversies, urban planning, etc. Every committed citizen will be able to monitor the community’s pulse just by clicking on a URL; it will be easy and efficient to launch (or to join) grassroots campaigns against the construction of an ugly overpass or for the clean-up a hazardous landfill. All of this is real.

As I write this, I listen to NYU professor Clair Shirky’s lecture delivered last September at the Harvard University Shorentsein Center (transcript and Video here). Always brilliant and convincing, Shirky revisited the 1992 pedophile priests scandal in Boston, one that was heavily covered by the Boston Globe, but died out due to a lack of resonance in the public. Evidently, today, things would have reverberated very differently.  So, yes, there is a useful future for local digital media.

Having said this, allow me to express a slightly skeptical view.

First, people tend to celebrate the hyperlocal web for the wrong reasons, that is the depletion of local coverage by traditional media. Last Thursday, I was at the University of Central Lancashire in Preston (UK) for its 12th Digital Editors Network. There, the British news agency Press Association presented a “Public Service Reporting” project. The PA would recruit legions of citizen journalists, they would be asked to comply with the agency’s ethics standards as they report on local issues. As for now, the PA is building several pilots and is looking for funding. Tony Johnston, The PA’s training chief who presented the case, stated its ambition: a network of 500 to 800 journalists costing £15m to £18m a year (€17-20m, $24-29m). In a preamble, he explained that the British newspapers’ shrinking local coverage paved the way to such an initiative (details in here).

Well. There are two ways of considering such move. One is to say: Great, community members take over the coverage that matters to them, they use all available tools: social network, live blogging, Flip-camera produced videos, to give local stuff the exposure it needs.
Another view is this: Doing local journalism is as complicated as any other kind of reporting. Poring over local financial records requires the same amount of time, dedication and expertise as digging into a national political party’s finances. Yes, citizen-like journalists will do fine reporting on “lighter” issues such as the state of schools or of the sewage system. But uncovering and preventing what really matters, such as the misuse of public funding, rigged bidding procedures for large projects and so on is a very different story.

More broadly, a professional journalist is required to avoid take sides in doing his or her job. Leaving such coverage to self-appointed journalists is opening the pandora’s box to all kinds of agenda-driven reporting. More

The French Edgar Hoover and “his” media dependents

Picture this in today’s American media: an Edgar Hoover-like chief of a major police agency cozying up to veteran reporters of Newsweek, The Washington Post, The New York Times, The New Yorker. To these cronies, the chief feeds dirty information, unverified gossip, unproven suspicion of corruption of X or Z, all of it “dug up” by federal investigators paid with taxpayers’ money. In return, the happy recipients share the loot with their handlers. And if they don’t, they quote “anonymous sources”.

This is exactly what happened in France, up to Yves Bertrand’s 2004 retirement. For 12 years, he was the director of a special branch of the French police (les Renseignements Généraux — General Intelligence). His carefully maintained and amazingly chatty notebooks have been subpoenaed in a recent slander case involving former prime minister Dominique de Villepin.

A book published last week, “Les Carnets noirs de la République“, pores over 2000 pages of the Gallic Hoover’s notebooks. The deciphering was done by Patrick Rougelet, a former deputy of this special branch who was fired when he began to investigate his boss’ financial dealings (don’t do that).

One of the most delightful chapters exposes the relationships between this police branch and the Who’s Who of French investigative journalism. The hooverish Yves Bertrand weaved close relationships with people at dailies such as Le Monde or Libération, and weeklies such as l’Express, Le Point, Marianne, to name but a few. In those organizations, regular correspondents — the book calls them “the perfused” –  traded information on a regular basis. Yves Bertrand also fed the French PR goddess, Anne Méaux (today, she advises French billionnaire François Pinault, but also Indian steel magnate Lakshmi Mittal and Banque Lazard). If that wasn’t enough, Frédéric Ploquin, one of Bertrand’s correspondent, had the nerve to be the interviewer for the self-justifying book, Ce que je n’ai pas dit dans mes carnets, published by the former skunk-police chief. Ploquin, the self-appointed “Grand Reporter”, works for Marianne, probably the most sermonizing French weekly (how come a newsroom can tolerate such a living journalistic accident remains a mystery to me).

Yves Bertrand’s former perfused are genuinely annoyed by this unpleasant coming out. But they are numerous and quite active. Actually, a good indicator of their penetration is the scarce number of reviews the book has got in the French medias. Omerta is an Italian vocable it seemed…

Yves Bertrand's calligraphy: About the Dassault dynasty (aircraft maker, media): "Father and son, people side, penny pincher and fond of blondes"


The End of Walled Gardens

If there is one side of Scandinavian medias’ strategy I find particularly convincing, it is their ability to cooperate as much as they can, and to compete on what matters most, that is the product, the user experience, the reader. To describe this, Americans, the world’s best neologists, invented the world “coopetition”, cooperation + competition. This is exactly the kind of attitude that should prevail in these difficult times. And, to a larger extent, the burgeoning world of online medias would be well advised to get rid of their antiquated close-to-the-vest thinking. Time to tear down some walls.
Many medias are, or will be integrated into hybrid models — with digital and paper products blended together. Therefore, distinctions by news vectors are pointless. Let’s consider four sectors where cooperation among competing entities will be critical in the coming years :

Advertising. Whether it is measured in inches, centimeters or pixels, newspapers or websites don’t sell ad space in the most optimized way. Commercial brands and their surrogates, the media buying agencies, keep increasing the pressure on medias to get higher discounts; in a country such as France (which roughly reflects the global marketplace), the net revenue per page sold went down 20% in the last twelve months. Even though French papers and magazines depend less on advertising for their survival than their Anglo-Saxon counterparts do, it’s a matter of concern.
There is no room for finger-pointing here: media buying people are doing their job, which is getting the best bang for their client’s buck. But medias can team up and propose (or impose) advertising packages based on socio-demographic structures, for instance. To a large extent, Rolex or Mercedes-Benz don’t give a damn whether they are favoring media X or Y as long as they are sure to reach the affluent people who might turn into customers. Or Nestlé’s baby food brands looking for child-rearing couples.

Logistics. When I’m traveling to New York, I’m always stunned to see half-empty delivery trucks emblazoned with the name of prominent newspapers, criss-crossing the city, sometimes twice a day (early and late edition). At the same time, I feel sorry for French publishers who have to deal with a distribution system so inefficient that it ends up with one point of sales for 2100 inhabitants versus Norway’s one for 360 people (no wonder why Norway’s rate of readership is four time higher than France’s). Up there, a cross-brands cooperation makes it economically viable to distribute newspapers in the most northern village during winter. In Paris, finding an open newsstand on a Saturday afternoon is an achievement. More

Rotten Apples in the Reviews Barrel

A few weeks ago, professional blogger Kevin Dixie received a strange proposition: a US‑based company offered to buy from him 30,000 reviews for a new iPhone application at $1 per review. Positive reviews, needless to say. Moreover, the marketing company proposed to extend the deal for 30 applications, about 10 to 20 times a month. A huge potential windfall for Kevin Dixie — who declined the offer. This British entrepreneur living in France created two specialized consumer products reviews sites: FuelMyblog, and its recent offspring launched in September.

In both cases, the idea is the the same: a casual blogger from the network writes whatever review he or she wants to in exchange for a free product. The item can be an electronic appliance worth a few dozens of dollars (sterling pounds actually, the company is UK based) or it can be a trip worth a thousand dollars. The brand pays FuelMyBlog 25£ ($40) per review, that’s how Dixie makes its money. (The process also results in those brands getting higher Google pageranks). With the explosion of the iPhone applications business, Dixie decided to roll out a dedicated site based on the same idea: the blogger purchases the app, tests it, writes a review and FuelMyApp reimburses him for the price of the application via its PayPal account. More

The Cash Is In The Topics

All conversations I keep having about the economics of a news web sites revolve around two key ideas: how to increase both the duration and the depth of a visit. In this respect, much work remains. For August 2009, here are the numbers of page views, as measured by Nielsen Net Ratings on the French market. :

  • Online gaming:         between 400 and 600 page views per person and per month
  • Facebook:………………………411
  • Google:………………………….260
  • Meetic (dating site) :………..208
  • Leboncoin (free classified):..182

That was for the top 17 French sites ; further down in the rankings, medias sites go like this:

  • TF1 (n°1 television network):…39
  • Le Monde (national daily):………24
  • Ouest-France (regional daily):…22
  • 20 minutes (national free):…….20
  • Le Figaro (national daily):………20
  • Les Echos (business daily):…….14
  • Rue 89 (pure player):……………10
  • LePost (pure player):………………8
  • Liberation (national daily):……….8
    (Those numbers apply widely elsewhere as behaviors don’t vary much from one market to the other)

Well. You see where I’m going: if you set aside tricks such as massive video or slide-show contents used to artificially increase page view numbers, heavily used news sites such as Le Monde’s or Le Figaro’s get less than 5% of the monthly page views of a gaming site. Agreed, you shouldn’t compare gambling and consuming information; but in analog life, there isn’t the wide difference we observe in the digital universe, on line, between the amount of time people spend playing the lottery or betting on horses, and reading a newspaper or a magazine. In other words, the internet hugely accentuates the viewer’s “engagement” in favor of social entertainment, at the expense of consuming solid, but static contents such as news. Depressing indeed. But here is the good news: there is room for improvement.

If we take 4 pages per visit as a credible average for a news site, adding 2 more pages  per visit will sharply increase the actual advertising revenue per visit. Not by 50%, of course, since the more you add pages, the less valuable they become (CPM drop fast once you leave the hottest part of a site), but still worth the effort. More

Medias : time to fix the training problem

Let’s start with sobering facts :

  • the top 10 in-demand jobs in 2010 didn’t exist in 2004
  • today’s learner will have had 10-14 jobs… by the age of 38
  • new CEOs landing in a “great” company will devote most of their time, months or years, to placing the right person in the right slot.

How does the media industry react to such facts? Well, each time I’m pitching this question to a group of editors ad publishers, in Europe, India or in the US, the discussion reaches the same conclusion: insufficient training is our biggest collective failure. (There is the notable exception of Nordic countries. I’m fairly familiar with them: over there, the very notion of education and continuous training is deeply rooted in the national and corporate culture — but they are not immune to inefficiencies either).

Everywhere else, we witness two major impacts on organizations.

First, on human resources management. In most cases, there isn’t anyone tasked with taking care of careers. No one wonders: What is this individual good at? How can this person improve and, therefore, derive more psychological, not to say spiritual satisfaction from his/her professional life? How does he sees himself five years from now? And so on.
At the same time,  real compensation policy is almost nonexistent, except for a salary scale, the misbegotten result of painstaking negotiations between management and union representatives. Carved in stone, these Tables of The Law shield everyone from responsibility. Which leads to talk like this :  “— I can’t give you a raise, pal, you’d be out of the scale. But, by next year, I can promote you to Deputy Assistant Managing Editor in charge of such and such… — But I’m not interested in managing anyone, I just want to do the reporting job I’ve been doing for seven years now, but for a better wage, that’s all. — I know, but it’s the only way…”
No wonder layers of accidental managers have built up over the years — and, of course, without any training to handle such responsibilities. More

Web + Print: A Powerful Combo

In today’s context of massive revenue depletion, everyone (almost) agrees on one thing: digital media revenue sources will have to be diversified. There is no magic bullet, no dominant model that will guarantee, by itself, a sustainable revenue stream. Time to think the hybrid way.  Free will coexist with paid-for, different users (occasional vs. intensive) will be discreetly assigned different revenue models, platforms will diversify as technical standards for publishing or transactions emerge, opening new fields for monetization. Old churches and ideologies will crumble.

The biggest stimulus for such creativity is the collapse of the internet advertising model. On average, CPM (cost per thousand viewers) have dropped by 30% – 40% during the last twelve months and very few expect a recovery.  As far as booking rates are concerned, they are dropping as well. It is frequent to see only a mere 30% of pages inventories actually sold to advertisers. Unlike prices, this latter percentage is likely to bounce back at the first sign of economic relief.

But the classical advertising model’s weakness is more structural. The “old” banners / display stuff doesn’t fly as expected. People simply don’t click enough on those items and even sophisticated targeting yields minor relief. The only “healthy” segment is search ads, but it is dominated by the Google Way — a massively deflationary one. Successful medias will be the ones who manage to shake off the old cobwebs and proceed to rethink their relationship with the advertising sphere. It will be fairly easy for social or non-hard news sites, but true information content vehicles are likely to struggle with ethical issues…

As far as platforms are concerned, last week, we looked at smartphones: they’re on their way to become the main vector for news, whether it is for text or video. Numbers looks good: last year, according to IDC, on the 1.19 billion mobile phones sold worldwide 155 million (13%) where smartphones. In 2013, says IDC, 1.4 billion handsets will be sold, among them 280 million (20%) smartphones. And if anyone harbored any doubt regarding the ecosystem’s health, just consider the 65,000 applications available for the iPhone and the state of the competition. As explained in this Fortune magazine story, the sector is red-hot: since the iPhone introduction in june 2007, Blackberry quarterly sales have more than tripled. Even Google joined the fray with Android phones — and following a trajectory than will put the search engine to a collision course with Apple (see Jean-Louis’s column War in the Valley; Apple vs. Google).

Coming back to the title of today’s column, let’s talk about paper, the pulp, dead tree version. I can see many reasons why some sort of paper version can help. More