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Why Media Apps Aren’t as Good a Business as They Seem

Source: Jeff Bercovici
Story by: http://blogs.forbes.com/jeffbercovici/

It’s long been an article of faith among media optimists that the shift to digital publishing would be a good thing for publishers in the long run, freeing them of the burden of their biggest costs: paper, printing and postage.

That’s why I was surprised to hear David Link, founder and creative director of the digital design firm The Wonderfactory, say, at a recent conference, that producing and distributing app-based magazines for tablet computers and other mobile devices is as costly as putting them out with ink and paper, if not more so. The problem, he told me afterward, is bandwidth. Magazine apps are large downloads. One of the biggest, the early version of Wired’s iPad edition, was around half a gigabyte.

If you’re selling directly through Apple’s iTunes store, that’s no problem: Apple handles the download — in exchange for a 30 percent cut of the sale price. But most publishers aren’t satisfied with that arrangement, which leaves Apple in control of the customer relationship and the resulting data and, for now, limits them to selling single copies rather than subscriptions. However, says Link, “if they’re going through the subscription route and they want to circumvent that” — for instance, through Zinio, a digital publishing services provider with an app of its own — “then they actually have to pay for all that bandwidth.”

Over time, of course, bandwidth gets cheaper, and file compression gets better. Link says most magazine apps now fall in the range of 80 to 250 megabytes per issue, and “I’m hoping they’ll get down to 30 to 50 megs.” But set against that is the pressure to inflate them with ever more rich media. Just as publishers once conditioned readers to expect that all print content ought to be free online, now they’re teaching consumers to expect magazine apps that are tricked out with videos, interactive graphics and more. Link points out that Sports Illustrated’s iPad app, which Wonderfactory developed, features 50 to 100 photos per issue not found in the magazine. And all that extra content doesn’t produce itself, either: Link estimates that putting out an enhanced mobile edition requires two to five extra staffers.

None of this is to say media apps won’t be a great business at some point. But if and when they get there, it will be because of of the high rates publishers will be able to charge for rich, interactive, targeted advertising. Take that out of the equation and app-based publishing, like print publishing, is a cost-heavy, money-losing proposition.

Rupert Murdoch creates ‘iNewspaper’ – with the help of Steve Jobs

News Corp reportedly set to launch iPad news publication exclusively via download

Source: guardian.co.uk/

Rupert Murdoch, head of the media giant News Corp, and Steve Jobs, the chief executive of Apple, are preparing to unveil a new digital “newspaper” called the Daily at the end of this month, according to reports in the US media.

The collaboration, which has been secretly under development in New York for several months, promises to be the world’s first “newspaper” designed exclusively for new tablet-style computers such as Apple’s iPad, with a launch planned for early next year.

Intended to combine “a tabloid sensibility with a broadsheet intelligence”, the publication represents Murdoch’s determination to push the newspaper business beyond the realm of print.

According to reports, there will be no “print edition” or “web edition”; the central innovation, developed with assistance from Apple engineers, will be to dispatch the publication automatically to an iPad or any of the growing number of similar devices.

With no printing or distribution costs, the US-focused Daily will cost 99 cents (62p) a week.

According to the US elite fashion industry journal Women’s Wear Daily, the Murdoch-Jobs “newspaper” will be run from the 26th floor of the News Corp offices in New York, where 100 journalist have been hired, including Pete Picton, an online editor from the Sun, as one of three managing editors. The editor of the Daily has not been announced, but observers are assuming it will be Jesse Angelo, the managing editor of the New York Post and rising star in the News Corp firmament.

Angelo, who was at school with Murdoch’s son Lachlan, was formerly editor of the Post’s business section and has recruited the tabloid’s gossip columnist Richard Johnson to run the Daily’s Los Angeles bureau. Other staff include Sasha Frere-Jones, a music critic at the New Yorker, who will oversee arts and culture. News Corp’s pattern of hiring for the project suggests that video will be a major component of the new publication.

The 79-year-old Murdoch is said to have had the idea for the project after studying a survey that suggested readers spent more time immersed in their iPads than they did – comparatively speaking — on the internet, where unfocused surfing is typical.

Sources say Murdoch is committed to the project in part because he believes that the Daily, properly executed, will demonstrate that consumers are willing to pay for high- quality, original content online.

Murdoch believes the iPad is going to be a “game changer” and he has seen projections that there will be 40 million iPads in circulation by the end of 2011. A source said: “He envisions a world in which every family has a iPad in the home and it becomes the device from which they get their news and information. If only 5% of those 40 million subscribe to the Daily, that’s already two million customers.”

But Murdoch’s success with internet ventures is mixed. The Times recently said it had gained more than 100,000 paying customers for its web edition, while the Wall Street Journal now has more than two million readers behind a partial paywall. But MySpace, once the leading social networking site, which Murdoch paid $580m for in 2005, is now an also-ran in the field, and Murdoch is running counter to current thinking that web publications need print editions to justify themselves to advertisers.

Apple has been expected to announce a subscription plan for newspapers based on the model of its iTunes music download service, but some publishers have been unwilling to let Apple in as an intermediary or let it control pricing the way iTunes has done in the music business.

“Obviously, Steve Jobs sees this as a significant revenue stream for Apple in the future,” Roger Fidler, head of digital publishing at the Donald W Reynolds Journalism Institute, told the San Jose Mercury News recently.

And with Apple expected to dominate the tablet market until compelling competitors are introduced, Murdoch may have no choice but to ride with Jobs. According to Women’s Wear Daily, Jobs is “a major fan” of the newsprint patriarch: “When the project is announced, don’t be surprised if you see Steve Jobs onstage with Rupert Murdoch, welcoming the Daily to the app world.”

• This article was amended on 22 November 2010. The original described Sasha Frere-Jones as a former music critic at the New Yorker. This has been corrected.

New owners of Canwest papers targeting business offices after slashing editorial, advertising jobs

Source: cwa-scacanada.ca

Postmedia Network, having just slashed scores of jobs in editorial and advertising departments across the former Canwest chain, is now turning its sights on the newspapers’ business offices.

The new company’s owners plan to begin centralizing the finance departments’ functions in Toronto and Winnipeg by the end of January. Staff reductions will be accomplished through buyouts and layoffs.

While Postmedia says it does not envision departmental closures, it is unknown how many business office jobs will be lost across the chain, which includes the flagship National Post, Calgary Herald, Edmonton Journal, Ottawa Citizen, Montreal Gazette, Vancouver Sun and Province, and the Victoria Times-Colonist.

Cuts in a newspaper’s business office will undoubtedly reduce local service and mean fewer connections between the paper and the people it serves in the community.

 “While any staff cuts are lamentable, we are particularly concerned about the editorial jobs that have been eliminated,” says Arnold Amber, Director of CWA Canada, which has members at five of the former Canwest papers. “Cutting reporters, photographers and editors certainly does not improve the quality of a newspaper.”

Although Postmedia is justifying the cuts by saying it wants to focus on a move to digital media, getting rid of experienced journalists is a recipe for mediocrity, says Amber.

“Loyal readers of these newspapers, advertisers and business customers expect high-quality local service and news coverage. If all of that is diminished, it does not bode well for the future of that community’s newspaper,” he notes.

The cuts have been swift and deep since Postmedia’s new fiscal year began on Sept. 1. CEO Paul Godfrey, while acknowledging that nearly all of the 11 Canwest dailies are profitable, is looking to recover $40 million to help pay down debt incurred when Postmedia bought the chain from Canwest.

CWA Canada has determined that Postmedia has shed at least 228 employees, including managers, across the chain. While it is difficult to obtain precise figures, the union estimates there have been about 100 cuts in advertising and at least 70 in editorial. Overall, CWA Canada has lost about 50 members as a result of the cuts.

Last year, Canwest chopped almost 800 jobs or 13 per cent of its workforce, while struggling under creditor protection, leaving Postmedia to inherit about 5,000 employees.

The most recent cuts were achieved by either buyouts or layoffs, with the former dominating at unionized newspapers and the latter at non-union papers.

One source told CWA Canada that all the cuts at the non-unionized Calgary Herald were layoffs. “Nobody was offered a buyout in the Herald newsroom; they were just laid off. Management announced that 35 jobs would be chopped, including eight in the newsroom.” The source adds: “The deskers (copy editors) feel like the sword of Damocles is hanging over them because management classifies them as ‘non-content providers’ and considers them expendable.”

This suggests that Postmedia is prepared to have its reporters and correspondents publish directly to the Web, without an experienced copy editor in between, ensuring an article’s accuracy, balance and, in many cases, legally acceptable reportage.

The Cuts
Calgary Herald
Jobs cut: 35 layoffs / 8 editorial positionsEdmonton Journal
Jobs cut: 20 (2 layoffs) / 8 editorial positionsMontreal Gazette
Jobs cut: 27 (23 union) / 10 editorial positions (includes 2 retirements)Ottawa Citizen
Jobs cut: 42 (17 union) / 10 editorial positions Regina Leader-Post
Jobs cut: 18 (3 layoffs) / 3 editorial positions
Saskatoon StarPhoenix
Jobs cut: 9 (unconfirmed)Vancouver Sun
The Province

Jobs cut: 50 (48 union) / 20 editorial positionsVictoria Times-Colonist
Jobs cut: 12 (12 union) 
2 editorial positionsWindsor Star
Jobs cut: 8 / 7 editorial positions

Newspapers must find ways to sell content

John Shmuel, Financial Post · Thursday, Nov. 11, 2010

Source: financialpost.com

Newspapers will certainly survive well into the future, but that survival is going to rely on finding increasingly new and innovative ways to monetize their content — and not just putting up pay walls.

Finding a happy middle was the message that came through most strongly during the Media in Transformation conference held in Toronto Thursday which was hosted by the Audit Bureau of Circulation.

Paul Godfrey, chief executive of Postmedia Network Inc., which owns the National Post, and one of the event’s speakers, said right now all eyes are on newspapers such as The New York Times, which will put up its pay wall in January.

“You know, I think everyone is exploring pay walls. Everybody seems to be waiting to see what happens,” he said in an interview after his speech. “The fact is that that’s going to be one of the big questions.”

Keeping readers, and drawing in new ones after a pay wall goes up meanwhile elicited different opinions from a panel that sat down to debate whether readers should be paying for content at all.

One of the panelists, Andrew Madden, who is Google’s head of strategic partnerships, said newspapers risk bleeding off readership if they erect pay walls that make them invisible to search engines.

“You need to think strategically on how to use search engines and pay walls,” he said.

Mr. Godfrey stressed that innovation was an important facet in monetizing the content of newspapers.

He cited an example where a newspaper might have a restaurant review section, and allow other users to comment or submit their own reviews. In order to monetize the content, the newspaper could charge restaurant owners to post their own submissions about their business, or even post their menus.

“Restaurateurs don’t traditionally advertise in newspapers, it’s just too expensive for them,” he said. “But something like that gives them an opportunity to be able to use our platform.”

Mr. Godfrey also said it was crucial that the newspaper industry direct capital spending toward improving digital con-tent, rather than spending it on traditional technologies.

“We can’t be spending it on printing presses because, A, they’re very costly, and you can get a printing press that’s 20 years old and it’s still in great working condition,” he said. “But now printing presses have colour on every page for example, so you’re behind the times five years after you spend millions and millions of dollars.”

And whereas improving the traditional newspaper medium will likely only serve to impress current readers, Mr. Godfrey said increasing capital spending on digital content and delivery will help build an audience, since digital content can engage audiences in ways newspapers can’t.

Of course, funding digital content won’t matter unless people are willing to pay for it. The good news, however, is that most of the event’s speakers believed that readers are willing to pay for quality content.

“If you have exclusive content, niche content — people are drawn to that,” said Lynne Brennan, senior vice-president of circulation for Dow Jones & Company. “If you provide readers with something they want, they’re going to pay for it.”

jshmuel@nationalpost.com

We thought the internet was killing print. But it isn’t

Peter Preston

The Observer, Sunday 17 October 2010

There is no clear correlation between a rise in internet traffic and a fall in newspaper circulation. Some papers are growing in both formats, others are succeeding in neither, according to new research.

 

The woe, as usual, is more or less unconfined. September’s daily newspaper circulation figures, as audited by ABC, are down 5.31% in a year: Sunday totals are 6.7% off the pace. And, of course, we all know what’s to blame. It’s the infernal internet, the digital revolution, the iPad, laptop and smartphone taking over from print. Online is the coming death of Gutenberg’s world, inexorable, inevitable, the enemy of all we used to hold dear. Except that it isn’t.

A fascinating new piece of research this week looks in detail at the success of newspaper websites and attempts to find statistical correlations with sliding print copy sales. As one goes up, the other must go down, surely? These are the underpinnings of transition.

But “in the UK at least, there is no such correlation”, reports the number-crunching analyst Jim Chisholm. “This is true at both a micro-level in terms of UK newspaper titles and groups and at a macro-level comparing national internet adoption with circulation performance. Indeed, the opposite case could be argued: that newspapers that do well on the web also do better in print… Understandably worried traditional journalists should know that the internet is not a threat.”

Chisholm’s aim is to prod British publishers into renewed web action – citing the Guardian, Telegraph and Independent particularly for producing the highest ratios of monthly unique visitors to their sites when compared against print circulations. (The Guardian, with a 125 unique-visitor-to-print ratio, is far higher than any other European paper he can find, and also generates over three times the number of UK page impressions relative to its circulation). Moreover, UK national papers as a whole score well on such tests, clear top of the EU league and walloping German performance nine times over.

Could they, and British regionals, do better, though? Indeed they could. “The issue is not one of total audience, but of frequency and loyalty – and online, as in print, newspapers are great at attracting readers from time to time, but they don’t attract them often enough, and they don’t hang around.”

At which point, perhaps, it’s time to look at the flipside of Chisholm’s findings. If the name of one game is frequency and loyalty – via investment, innovation, constant linkages and promotions – might that not also be an answer to drooping print sales as well? If you reject the net as an agent of newsprint doom, then reverse scenarios also apply.

Go back to ABC circulations before newspaper websites really began – say September 1995 – to make the point. One, the Daily Star, is doing better than 15 years ago with no net presence to speak of: 757,080 copies in 1995 against 864,315 last month. The Daily Mail, at 2,144,229 this September against 1,866,197, is well up, with a website growing by more than 60% a year. Some – say the Mirror, down from 2,559, 636 to 1,213,323 – have suffered direly. See: no correlations?

The Guardian, Times and Telegraph are all down by around a third, and the Sun has lost more than a million: but again there’s no mechanical relationship here. Price matters. It always does. But investment and innovation matter as well. They always do. And you can’t help by being struck how little of that goes on in print these days. A pull-out section vanishes, and comes back. Single-theme front pages come and go at the Indy. The Telegraph still looks for somewhere else to put its features. Nothing much changes. Another researcher (at Enders Analysis) calculates that papers have lopped 20% of the pages they put in a decade ago in order to bulwark sharply rising cover prices.

No correlations here, either? Nothing to prove that the more effort and talent you put in, the more you get out? More, more, more … and more research, please.

TC Employees’ United Way Campaign Kick-Off

United Way of Greater Victoria

Just a quick note to remind our members that the Times Colonist Employees’ United Way Campaign is fast approaching. In these times of economic uncertainty, those hit hardest are those who can least afford it. We are fortunate here at the Times Colonist in that our regular employees have the opportunity to make contributions through payroll deduction. This makes it much easier to make an impact while minimizing the hit to our pocketbooks. Please give your canvassers a moment when they come around to you. Whether you’re a long-time contributor or a brand new donor this year, any amount will be greatly appreciated! Thank you.

 Sincerely, 

Victoria Joint Council of Newspaper Unions.

CEP Local 2000 – Newspaper Guild Local 30223 -TNG-CWA Local 30403 (Mailers)

“United We Bargain, Divided We Beg”United Way of Greater Victoria

Just a quick note to remind our members that the Times Colonist Employees’ United Way Campaign is fast approaching. In these times of economic uncertainty, those hit hardest are those who can least afford it. We are fortunate here at the Times Colonist in that our regular employees have the opportunity to make contributions through payroll deduction. This makes it much easier to make an impact while minimizing the hit to our pocketbooks. Please give your canvassers a moment when they come around to you. Whether you’re a long-time contributor or a brand new donor this year, any amount will be greatly appreciated! Thank you.

 Sincerely, 

Victoria Joint Council of Newspaper Unions.

CEP Local 2000 – Newspaper Guild Local 30223 -TNG-CWA Local 30403 (Mailers)

“United We Bargain, Divided We Beg”United Way of Greater Victoria

Just a quick note to remind our members that the Times Colonist Employees’ United Way Campaign is fast approaching. In these times of economic uncertainty, those hit hardest are those who can least afford it. We are fortunate here at the Times Colonist in that our regular employees have the opportunity to make contributions through payroll deduction. This makes it much easier to make an impact while minimizing the hit to our pocketbooks. Please give your canvassers a moment when they come around to you. Whether you’re a long-time contributor or a brand new donor this year, any amount will be greatly appreciated! Thank you.

 Sincerely, 

Victoria Joint Council of Newspaper Unions.

CEP Local 2000 – Newspaper Guild Local 30223 -TNG-CWA Local 30403 (Mailers)

“United We Bargain, Divided We Beg”