Lou Heldman on media, technology and society

From World Headquarters at Wichita State University 

The theory, reality and promise of something for nothing

There’s a fascinating discussion raging about the commercial value of free. It's sparked by a new book, Free: The Future of a Radical Price, by Wired magazine’s editor, Chris Anderson.
His theory is that companies who give away some products gain a competitive advantage in selling other products. His examples are as old as free cookbooks to introduce Jello and as new as fre distribution of intellectual property on sites like Hulu. You can hear him talking about in this interview with Business Week.
About 5 minutes 45 seconds into the interview, he's asked about newspapers. The sad truth (though he doesn't seem very sad about it) is that the NY Times and the Wall Street Journal will probably be able to create enough premium content to stay in business; the rest can forget it.
Anderson's thinking about Free (always with a capital F in his book) has been challenged by the Great Explainer, Malcolm Gladwell, and by Dallas Mavericks owner Mark Cuban, among others.
In his July 6 New Yorker review, http://www.newyorker.com/arts/critics/books/2009/07/06/090706crbo_books_gladwell Gladwell summarizes:

There are four strands of argument here: a technological claim (digital infrastructure is effectively Free), a psychological claim (consumers love free), a procedural claim (Free means never having to make a judgment), and a commercial claim (the market created by the technological Free and the psychological Free can make you a lot of money). The only problem is that in the middle of laying out what he sees as the new business model of the digital age Anderson is forced to admit that one of his main case studies, YouTube, “has so far failed to make any money for Google.”
Why is that? Because of the very principles of Free that Anderson so energetically celebrates. When you let people upload and download as many videos as they want, lots of them will take you up on the offer.
That’s the magic of Free psychology: an estimated seventy-five billion videos will be served up by YouTube this year. Although the magic of Free technology means that the cost of serving up each video is “close enough to free to round down,” “close enough to free” multiplied by seventy-five billion is still a very large number. A recent report by Credit Suisse estimates that YouTube’s bandwidth costs in 2009 will be three hundred and sixty million dollars. In the case of YouTube, the effects of technological Free and psychological Free work against each other.

Cuban, who was a successful Internet entrepreneur before he became the bad boy of the NBA, has three disdainful posts about Free -- the adjective formerly known as free -- on http://blogmaverick.com/. He deals with some of the same objections as Gladwell, about production and distribution costs and competition, and concludes, "if you live by free, you die by free."




 

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Doing what come naturally


People Go Online to Access... People
Steve Smith, Jul 06, 2009 10:15 AM

One of the first big shockers in Ruder Finn's new survey and online "Intent Index" tool about why we go online is the relatively low status of shopping. Only 33% of users surveyed said they go online to buy things and even fewer (28%) say they log on to compare prices. Compare that gauge of online intent to the motive for socializing, where 92% of users say they are here to connect with others, "share" (86%) or "discuss" (76%).


"I was surprised how high the socializing intent came up and how low shopping intent came up," says Michael Schubert, Chief Innovation Officer, Ruder Finn. With the rise of eBay, Amazon, and comparison engines, for many years the Web was characterized as a "task-oriented" medium whose most direct appeal for marketers was accelerating the purchase process. But in the wake of Web 2.0 and highly evolved Internet habits, that path to purchase is a lot more complicated than it once was. "As a marketer, I can't just sell by pushing and selling," says Schubert. "I have to engage and entertain. These people are not coming to buy but to do these other things." In fact fully 100% of users admit that one of their main reasons to be online is to "pass time" and 82% are here to be entertained.  

The newly launched interactive tool from Ruder Finn polled 500 users about their intent for coming to the Web. Ruder Finn contends that an Intent Index helps get at underlying motivations that marketers can use to leverage digital more effectively. Ordinarily, markets might go online to harvest "buzz" or understand tone and desire from people's activities and discourse, but "even looking online doesn't always get you the answer," says Schubert. "Sometimes someone's intent isn't addressed yet online."


After offering users nearly 300 possible reasons for coming online, the researchers created a matrix of intentionality around seven key behaviors, from socializing to entertainment, shopping to learning. The data is also verticalized across key age and gender groups, and Ruder Finn will update the data quarterly to start to see trending as well. "The beauty of a system like this is that you can build the sample up over time," says Marty McGough, Director of Ruder Finn Insights. Ruder Finn seems to have learned from its own data as well. The Intent Index is itself a fun click-and-learn experience that zooms in and out of the data mine.

One of the data points that surprised McGough was how the future of Internet behaviors is not only apparent in youth but in ethnic minorities. "There is an interesting correlation between youth and minorities," he says. "They go online for similar reasons. African American and Hispanic [users] are being driven to social lives online and using it as a primary mechanism for establishing their own consumer dialogues. They come to socialize and to provide more opinions."

Indeed, across the board, one of the striking indicators from the Intent Index is the premium all Web users put on self-expression. About 62% of respondents said they are on the Web to voice an opinion, whether it is about politics, a restaurant or someone else's blog post. This represents a deficiency and an opportunity for marketers, Schubert argues. "Most of marketers' online communication doesn't allow someone to do that with them. If someone wants to sway opinion about something they have to go somewhere else. But if I am a marketer and someone is going to say something about my product I would rather be part of that conversation."

Schubert says that the lesson in this research so far is that many marketers still lag behind the motivations of their users and are marketing to the last stage of Web behaviors. "Marketers have moved from promoting to educating, but educating isn't enough. It isn't engaging in dialogue and conversation. I can tell you clients are thinking about doing these things, but they are not prepared to engage on an ongoing basis. They are used to a ‘two-way' conversation when someone doesn't have to respond to the user."

Lou says: It shouldn't be a shock that online has become primarily a gathering place. Since the discovery of fire, the invention of the wheel and the first cave paintings, humans have been adapting practical tools to fulfill their drive to share, discuss and express themselves.

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Social networking use jumps, led by Facebook and Twitter

From The Center for Media Research via MediaPost.com

According to Nielsen, total minutes spent on  social networking sites in the U.S has increased 83% year-over-year. In fact, total  minutes spent on Facebook increased nearly 700% year-over-year, growing from 1.7 billion minutes in April 2008 to 13.9 billion in April 2009, making  it the No. 1 social networking site for the month... and worth $10 billion last week according to analysts.

Jon Gibs, vice  president, media and agency insights, Nielsen Online, notes  "We have seen major growth in Facebook... and a subsequent  decline in MySpace.  Twitter... (is) perhaps  changing the outlook for the entire space... regardless of how fast a site is growing... it can quickly fall out of favor with consumers... (who) are willing to pick up their networks  and move them to another platform... at a moment's notice."

Top 10 Social Networking and Blog Sites (April 2009 U.S. Home and Work)

Site

Apr-08 Total Minutes (000)

Apr-09 Total Minutes (000)

Year-over-Year Percent Growth

Facebook

1,735,698

13,872,640

699%

Myspace.com

7,254,645

4,973,919

 -31

Blogger

448,710

582,683

30

Tagged.com

29,858

327,871

998

Twitter.com

7,865

299,836

3712

MyYearbook

131,105

268,565

105

LiveJournal

54,671

204,121

273

LinkedIn

119,636

202,407

69

SlashKey

N/A

187,687

N/A

Gaia Online

173,115

143,909

-17

Source: Nielsen NetView

April was the fourth month in a row that Facebook held the top  spot in both unique visitors and total minutes, but Myspace has been winning in online video with 120.8 million video streams.

Myspace visitors spent 384 million minutes viewing video on the  site, with an average of 38.8 minutes per viewer.  In comparison, Facebook visitors  spent only 113.5 million minutes viewing video in April, with an average of 11.2  minutes per video viewer.

Top 5 Social Networking and Blog Sites Ranked (April  2009, U.S. Home and Work)

Site

Total  Video Streams (000)

Time Spent Viewing (Minutes x 000)

Myspace.com

120,793

384,030

Facebook

41,537

113,502

Stickam

19,617

54,522

FunniestStuff.net

10,206

34,456

Funny or Die

6,503

17,725

Source: Nielsen VideoCensus, June 2009

Gibs concludes, "... maybe the better question to ask is who does each site reach, not who is  'winning'... and how are they building for the  future to maintain the loyalty of their visitors, who to this point have shown  little long-term loyalty to any specific platform."

For more information, please visit Nielsen Online here.

Lou says: It's important to recognize this isn't a zero sum game, with every gain coming at the expense of another player (in the way that cellphones are taking share from landlines). The social media sphere continues to expand through movement to mobile and expanding demographics.

 

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Global outlook for newspaper publishing in the digital age

PriceWaterhouseCoopers studied newspapers in developed countries and finds them facing most of the same issues as U.S. publishers, depending on the rate of digital adaptation. The 56-page PWC report, http://www.pwc.com/images/em/NewsPaperOutlook2009.pdf, says publishers need to address these basic questions:

l Is your brand identity clear - both internally and externally 

- and focused on what differentiates you from your 

competitors? 

l Are print and new media run as separate operations or as 

simply two different distribution mechanisms for the 

same core activity? 

l Do you have an integrated paper and online advertising 

sales team? 

l Are you using online to extend your core audience 

beyond the traditional print readership? 

l Will video journalism and print journalism co-exist online? 

l What does your audience want from you - and do you 

know what they will pay for? 

l Can areas of non-differentiation be outsourced? 

l Have you identified non-core activities that should be 

downsized or stopped? 

l Are you investing today with a clear view of the payback 

on that capital allocation? 

 

The PWC report is part of a useful suite of reference materials put together by the Knight Foundation, http://www.knightblog.org/journalism-on-track-for-2020/

 

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The Not-So-Hidden Politics of Class Online

Social media does not magically eradicate inequality. Rather, it mirrors what is happening in everyday life and makes social divisions visible. What we see online is not the property of these specific sites, but the pattern of adoption and development that emerged as people embraced them. People brought their biases with them to these sites and they got baked in.

Lou says: This is from a fascinating talk http://www.danah.org/papers/talks/PDF2009.html# by Danah Boyd, who has studied the differences among teens who are on MySpace versus those on Facebook. She takes that as symptomatic of the race/education/class divides in American society. She warns that those of us (I'm guilty) taking the pulse of America mostly on Facebook and Twitter are missing a big part of the picture.

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Social Network Users Reportedly Concerned About Privacy, but Behavior Says Otherwise

from readwriteweb.com
Written by Sarah Perez / June 30, 2009 9:02 AM / 2 Comments

Recently, new data from security solutions company Webroot revealed some interesting insights into the thoughts and behaviors of users on social networking sites like Facebook, LinkedIn, MySpace, Twitter, and others. According to their survey, a majority of users (78%) reported concerns about their social network profiles' privacy, but when asked about specific behaviors it was apparent that "concern" didn't translate into action. In fact, it didn't even seem to translate into a basic understanding of how to use the privacy tools already in place on the networks today.

Is Your Profile Public? Err...I Don't Know

Seeing that a majority of social networking users expressed concerns about the information they shared in their profile, it's somewhat surprising to find that 80 percent of those same users allow their profiles - or at least, part of them - to be indexed by public search engines like Google. And 66% of users don't restrict any profile information from being publicly searchable.

Those numbers are based on the realities of the situation as tracked by Webroot, but when asked directly about their profile's publicity, a lot of respondents didn't even know the answer. A whopping 59% of the 1100 surveyed said they weren't sure who could see their profile.

To top it off, 32% of users shared at least three pieces of identifiable information on their profile pages and 28% accepted friend requests from complete strangers. These sorts of behaviors show a distinct lack of understanding about the risks of sharing personal information with those you don't know. It also certainly shows that being concerned about privacy hasn't been enough of an incentive for users to take any action to change their behavior.

The Younger You Are, the More You Share Trust

Webroot also found that younger social networking users took more risks than any other demographic. Those users ages 18 to 29 tended to use the same password across multiple sites (51% versus 36% overall), accepted friend requests from strangers (40% versus 28% overall), and shared more personal information online. In this age group, 67% shared their birthday (vs. 52% overall), 62% shared their home town (vs. 50% overall), and 45% shared their employer (vs. 35% overall).

Not surprisingly, this overly trusting group also reported more security attacks than others with nearly 40% having experienced an attack versus 30% overall.

Are Privacy Settings Too Hard to Use?

What's surprising about these findings is that most of today's modern social networks provide privacy settings that allow you to keep your personal information from being indexed or viewed by anyone except those you choose.

Even simple social networks, like microblogging site Twitter, let you set your feed to private, if you so desire. Facebook, now the largest social network in the U.S., offers robust privacy settings and is working on making them even more reflective of our real-world relationships. But clearly, there's a disconnect between what tools are out there and the users' knowledge of what's available or how to use them.

What can social networks do, though? Is it enough to simply offer the tools then put the onus on the users to dig around until they find them? Or should there be more guides and wizards provided in order to make turning on privacy settings a chore that even the less technically-inclined can handle?

As it stands today with so many mainstream users joining social networks, it may be time that social networks stopped hiding privacy options features deep within the settings (an area we'd wager the everyday user rarely accesses). Networks need to start highlighting your options or at least linking to the settings, somewhere a bit more obvious - like the profile page itself, for example.

Of course, even if social networks did so, there would still be a subset of users who were simply uninterested in doing anything about it. We suppose they would still have to learn the hard way about the risks of over-sharing, but at the very least, a larger part of the online population would be able to protect themselves and their personal info.

Lou says: Users of social media should have low expectations about privacy of information they post. Anything shared should be considered discoverable by others beyond the circle of trusted friends.

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Small and Mid-Size Newspapers Ripe for Picking

Though small and mid-size newspapers have suffered fewer losses than big metro dailies, and many are “holding up well under the circumstances,” a study by brokerage firm Cribb, Greene & Associates found that some have put themselves up on the auction block for bargain-basement prices and are ripe for the picking.

 

Cribb, Green estimates that ad revenues at smaller newspapers are down between about 10% and 15%, compared with total newspaper industry revenues, which were down 16.6% in 2008 and 28.3% in Q1 09.  Despite some properties holding their own while cutting expenses, many smaller players are exploring joint ventures and partnerships and seeking buyers. The asking prices for such papers have never been cheaper, making some of them good investments in a “buyer’s market” the firm said.

“Many smaller newspapers can currently be purchased for between four and eight times their earnings before income tax, depreciation and amortization (EBITDA), said John Cribb, managing director, who points out that a few years ago, prices were between 10 and 14 times EBITDA, writes MediaBuyerPlanner.

Cribb does not believe that the future of the industry is as bleak as some industry-watchers suggest. “Conventional wisdom that the newspaper industry has failed is just plain wrong,” he noted. “Newspaper operators who aggressively pursue a disciplined acquisition model have the opportunity to create significant value in the next few years.

PricewaterhouseCoopers expects that newspapers will continue to suffer declines in total global revenue in coming years, losing a total of $25 billion by 2013 because of a steady decline in print ad revenue. Newspaper advertising will fall by a cumulative 32.7% throughout the next three years, but will begin to rebound in 2012, writes Editor & Publisher.

Lou says: The obituaries for the newspaper industry are premature, especially when it comes to small and mid-sized newspapers in communities not hit by sharp declines in housing prices.
Many of the most severe problems of larger newspaper companies stem from their debt loads, not from operating earnings declines.

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Gawker - A Million Monkeys Are Googling 'María Belén Chapur'

mark sanford

A Million Monkeys Are Googling 'María Belén Chapur'

By John Cook, 5:12 PM on Thu Jun 25 2009, 55,970 views (Edit post, Set to draft, Slurp)

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A barrage of conflicting and completely unreliable information is coming out about Mark Sanford's mistress. Let's have a look!

That picture is taken from a Blogger profile belonging to a one Maria Chapur. It looks a lot like the pictures that Business Insider has posted from a Facebook account. Is it the woman Sanford cheated on his wife with? We don't know. But it looks like an Argentinian newscast is making that claim.

Business Insider and others earlier published Facebook photos of a woman named "Maria Chapur" who lives in Buenos Aires. Business Insider has also posted video, apparently taken from a broadcast today on Argentinian television, of what is purported to be María Belén Chapur's undated tryout to be a television reporter. The woman in the Facebook photos is an artist, and frankly looks a little older to us than 43, which is Chapur's reported age. And she doesn't really look like the woman in the video. Again, we have no idea if that is the same woman that Sanford cheated on his wife with. The thing is, neither does Business Insider or anyone else.

But we don't really blame them. Everybody—including us—has spent all day frantically Googling the woman's name for digital traces, and all we've gotten are tantalizing clues.

Lou says: I loved the brilliant Gawker.com headline that popped up when I, along with half of America, went looking for more information on Gov. Sanford's special friend.

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PR Clients Demand More, Better Measurement

PR Clients Demand More, Better Measurement

Though 88% of PR practitioners believe measurement is an integral part of the PR process and 77% are currently tracking their programs for increasingly demanding clients, PR pros still do not agree on the best tools and methodologies to use, according to a recent survey.

The research, which was carried out by Benchpoint for The Association for the Measurement and Evaluation of Communication (AMEC) and the Institute for Public Relations (IPR), was conducted among an international sample of 520 PR pros. It found that more practitioners than ever are measuring the effectiveness of their communications programs, especially in response to client needs.

Client Measurement Demands Increasing

Clients, in general, are beoming more price sensitive, the study found. At the same time, they are asking their PR agencies to measure in more effective and targeted ways, especially in new media and in specific geographic areas.

General client trends toward PR measurement:

  • Client demand for measurement of online communications increased from 29% in 2008 to 41% in 2009.
  • Client demand for broadcast media evaluation is up from 15% of assignments in 2008 to 25% in 2009.
  • 77% of clients commission single country measurement programs or projects.
  • 69% of survey respondents say procurement specialists are becoming more involved in the purchase of measurement and evaluation services.

Disagreement on Measures

While an increasing number of clients are keeping their eye on metrics, most PR pros still judge their success by their ability to place material in the media rather than on the impact such coverage might have on shifting opinion, awareness, or moving markets.

This trend appears to be changing, the survey found. While the number of press clippings and advertising value equivalent (AVE) calculations remain perennial favorites, PR practitioners are now turning to more rigorous tools including internal reviews, benchmarking, the use of specialist media evaluation tools, focus groups and opinion polling.

The data indicates there are two camps - the output measurers (clippings and AVEs) and the outcome measurers who prefer more cerebral - and costly- measures (internal reviews, opinion polls etc).

“The survey presents a clear challenge to the media evaluation industry that more education is needed within the PR industry to demonstrate the business benefits of proper evaluation rather than continue to rely on clippings and AVEs,” said Mike Daniels, member of the Commission on PR Measurement & Evaluation and chairman of AMEC’s Business Development Committee.

Additional survey findings:

  • The majority of PR pros (88%) think measurement is an integral part of the PR process , and 70% believe this strongly.
  • The number of respondents (77%) who claim to measure their work is up from 69% in a similar survey five years ago.
  • Measuring ROI (return on investment) on communications is viewed as an achievable goal by the overwhelming majority of professional communicators taking part in the survey.

Barry Leggetter, executive director of AMEC, said: “It’s ironic but it has probably taken a recession to be the turning point for achieving a breakthrough in the recognition of the value that proper measurement can bring to a PR program.”

A full report with findings of the survey will be available at the end of July 2009.

Lou says: As traditional media recede in importance, it's becoming a greater challenge for public relations professionals to demonstrate their effectiveness to clients.

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Kindle coming

Awaiting arrival of my first Kindle. Any suggestions for newbies?

Update after a week of ownership:

Pros:

The wireless interface is dazzling. So quick!

I love being able to download samples of books. I've tried about 10 so far.

I'm sure it will be great for travel. No matter how much I bring with me to read, I usually wish I had something else, or something that didn't weigh so much.

The ability to easily adjust text size.

The Kindle always returns to the last page I was reading.

Cons:

I miss the physical feel of books; the Kindle is all hard edges.

The navigation is well engineered, but still feels clunky when looking forward or backward.

It's overpriced for a tool that does only one thing well.



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