The Key to Publishing's Survival

The Key to Publishing's Survival
Bob Sacks www.bosacks.com

The key to survival in the near and far future is for everyone in the publishing business to embrace everything digital. That doesn't mean you should stop printing magazines, but it does mean that if you aren't comfortable in the digital world you won't/can't survive. It is that simple.


All publishing leaders must jump in with both feet, learn the new languages, join Facebook, have at least 3 e-mail addresses, and get a Twitter page. If your kids speak the digital language and you don't, how can you possibly lead your flagship publication or publishing association into the new world? The answer clearly is that you cannot. If you are fearful of the Web's Second Life or worse, don't know what that is, then you can't have one.


To survive you must embrace digital technology like there's no tomorrow, because if you don't, there won't be. No one should be spared this digital education. Let me repeat that so we are on the same page: No one can be spared this digital education. That includes everyone from the mail room to the executive boards. I mean the leadership of MPA to the ABC. I am including the membership of the PBAA, GCA, PIA and the AARP. If you can't upload a video file and are not subscribed to several RSS feeds, you should be fired. If you can't convert a word docx file to a PDF, you are history. If you can't do the voodoo, you sure as hell shouldn't/can't manage those that do.


The rate of change in digital technologies is accelerating at an inhuman pace. If you don’t use it and aren't comfortable living in it, you can’t understand the importance of adapting your flagship for the times ahead, and you won’t be able to stay on the curve, let alone ahead of it.

I have recently come to believe that too much of our leadership is either incapable or too fearful to understand the true future of publishing. I think that we have limitless opportunities before us - the chance to reach more people and more advertisers instantly and more efficiently than ever before.

It is ok to love and respect our past and yet be prepared for the prosperous adventures ahead of us in the new world. There are 4 billion people connected to the web right now. That number will only grow. This should make any publisher salivate with here-to-fore undreamt of possibilities.

The question is who is going to lead you there. The old adage has never been truer: lead, follow or get out of the way. You have no other option

A Future for Newspapers

A Future for Newspapers
By ANDY KESSLER
May 24, 2007; Page A17
Wall Street Journal
http://online.wsj.com/article_email/SB117997297020012986-lMyQjAxMDE3NzI5NDkyNzQyWj.html


New technology is mucking up the media, and newspapers seem to be taking the brunt of it. Craigslist and eBay took away classified ad sales, direct advertisers are allocating budgets to search engines and circulation is receding faster than Bruce Willis's hairline. Investors seem to prefer the safety of television broadcasters and cable companies, with their nice, government-mandated franchises and pipes that reach directly into homes.

Media, after all, is about owning a pipe -- some conduit between the creation of news or entertainment and the eyeballs that consume it. Media companies sell the owners of those eyeballs lots of things we weren't even sure we needed. The higher the ad rates, the better the business. The pipe reaches the consumer directly, keeping competition at bay. The tighter the pipe, the less the competition.

For broadcasters, the pipe is spectrum given or bought from the Federal Communications Commission under the guise that spectrum is scarce. For cable operators, it is often the sole cable franchise in a town. For phone companies, it's those regulated copper wires, some of which are so old they have Alexander Graham Bell's teeth marks in the insulation.


And newspapers? Where's the pipe? What conduit to readers do they control? Well, there is the guy that drives up and somehow misses your driveway every morning. Or the sidewalk newspaper dispenser where the homeless man buys one copy and steals the rest so he can peddle them on street corners. So unless you are the only paper in town (ask Warren Buffett how much he makes on monopoly papers like the Buffalo News), there is not much of a pipe to control. Instead, reputation, quality news gathering, trust and credibility maintain the franchise, something The Wall Street Journal and the New York Times enjoy on a national level and the Washington Post and others have locally.

But so what, it's all over, right? The Internet has destroyed newspapers' business model. If Google News doesn't kill them, blogs certainly will. Hmm, maybe not so fast.

Last I checked, the Star Trek Holodeck, despite a Wikipedia entry, is still fiction. No one is teleporting a newspaper to your home anytime soon. Unlike music which can be copied once and stolen a million times, newspapers live in the material world. Thankfully, as an author, it's the same for books. Even a 30-inch screen can't match the readability of what cheaply spits out of a printing press. I really believe that the copy protection mechanism for newspapers is their consumer interface, in the form of ink spurted on newsprint. Newspapers are scrambling to embrace the Web. Paid subscriptions, blogs, it's all a grand experiment on how to monetize their expensive news-gathering organization. But thanks to a form that's hard to duplicate, newspapers still have time.

In the meantime, rather than just charge for content, I'd be licensing every type of newfangled software and Web service until I could come up with a tight community of interest around my newspaper, local or national. Don't just start the discussion, keep it. This means comments, reviews, personalized newsfeeds, social networks of like-minded readers, whatever. Give advertisers a little "link love" so they don't stray to generic search engines. Google, Microsoft and others dropped over $10 billion to buy online ad-delivery companies in the last few weeks alone. The value is there: Newspapers aren't in the printing business, they're in the ad business.

Technology is making things even more difficult for television and video as well. As technology advances, broadcast pipes leak like a sieve. TV these days, like it or not, is like music. The good news is that it's delivered electronically. The bad news is that it's, well, delivered electronically. Six megabit broadband and 250 gigabyte hard drives are wresting control from those who think they have it. Broadcast is about central control: pumping out signals from giant antennas in the middle of town or from cable "head ends." The Internet is about moving packets around from hop to hop until it gets where it needs to go. No central control.

The real dark cloud is technology known as peer-to-peer (P2P) bubbling up from the underground that leverages this architecture. Here's how it works: I might have a copy of this week's "American Idol" on my hard drive. You want a copy, you stream it from my PC, not FOX. Then you share it with five or six people that are close to you geographically so it gets to them quickly. They share as well, and on and on. Live video streams like a virus, which means once started you can't stop it.

Cable may be the first to get flushed. The industry pays bribes in the form of franchise fees to local municipalities to be the only game in town. Telcos like Verizon and AT&T have lobbied hard to change video franchising rules. Verizon has had some success in Texas and, on March 1, the California Public Utilities Commission streamlined the rules to open up video distribution to competition. New services like Verizon's FiOS fiber to the home may finally become a reality. Another pipe in town! Add to that the proliferation of municipal Wi-Fi rollouts and other entrants like Craig McCaw's ClearWire. Price war anyone? The fact that Comcast and TimeWarner are carrying more debt than a condo-owning subprime borrower means this could get ugly in a hurry.

But what about guys who own networks and create shows? Are they safe? Well, if they decide to harness technology, they can license channels like ESPN and/or shows like "Grey's Anatomy" to all comers on the distribution side. But this is easier said than done. Network affiliates still think in 10 p.m. time slots and cable operators insist on exclusives. P2P -- the same stuff Skype uses to bypass the old phone network -- may change the definition of a TV network.

BitTorrent and eDonkey are the top P2P networks and half the usage is for TV shows. P2P hogs something like 35% or more of all Internet traffic. Thirty-five percent! But to replace cable, it has to be real time, and there are tons of real time P2P players, especially out of China: TVU, SopCast, PPMate. As I write this, I'm watching ESPN on my PC, denying Disney another outrageous $2.30 per month they charge me via Comcast. Just as the iPod opened up stolen music to the masses, devices like Apple TV mean I can stream to my wide screen. Is this Napster redux? It might well be. TV is no longer the safe cuddly business it once was.

Lots of painful restructuring is still ahead. But it's worth noting that Rupert Murdoch would bid to expand his newspaper empire. Perhaps he sees the same pipe-busting in the future of TV.

Mr. Kessler is the author of "The End of Medicine" (HarperCollins, 2006).