A significant move happened in the online publishing world this week and it is a sign of things to come for any online publishing company that is burning money managing their own hosting operations.
Newsweek.com announced this week that the site is outsourcing its Web site hosting duties to Amazon, joining a small but growing number of companies experimenting with cloud computing.
“Until now, Newsweek.com had been hosted by its parent company, The Washington Post Co. The media company has been trying to cut losses at its magazine division, which recorded $29.3 million in operating losses in 2009. By joining the cloud, Newsweek expects to save close to $500,000 annually.
“It saves Newsweek money,” said Geoff Reiss, vp, general manager, Newsweek Digital.
“Lots of people out there built their own infrastructure and are going to be tortured by this idea of sunk costs.”
Kontexto started using Amazon Web Services in early 2008 and now our whole real time content analytics platform is built on the Amazon cloud. We have always been lobbing the idea around of launching a cloud based news infrastructure that takes care of everything post publishing including storage, search, delivery and analytics. Give the CMS and editing freedom to the content creators, but hand off everything else.
After newsweek.com, it is hard to say who will be the next to transition hosting to the cloud. Some other certainly have without announcing it. But it is good to see a brand name publication make an organizational shift to the cloud.
The exclamation point is their touch, not mine. But, the all out battle has begun between the news paywallers and the legions of hacks that seek to get around those paywalls with their wallets no lighter than when they arrived.
BreakthePaywall! is the first news paywall hack I have come across that is looking to promote itself and gain adoption amongst people looking to circumvent news paywalls.
Looks like it is a browser add on that simplifies the process of deleting cookies, which news sites plant to track how many free articles are read before they cut you off. For existing account based paywalls that charge for everything, they are hardly a threat. But, I think this serves as a reminder of the reticence to pay for general online news content.
They are currently seeking donations to fund the development of the service and I suspect grow the slush fund for their legal team when the times comes.
The UK Association of Online Publishers (AOP) released its annual Organisation Census today and although you have to be a member of the AOP to read the full report, you can see an in depth overview of the census data in this release at econsultancy.
The census had a 100% response rate and it seems thing are looking up for online publishers in 2010 with hiring, new product development and a general sense of optimism back on deck.
I can certainly attest to the fact it has been a tough 2 years since the general economy and traditional media took a nose dive. Our original business plans had to be put on hold for a while given frozen budgets and a general uncertainty amongst online publishers. But I can support some of the optimism in the census data as we are back in meeting rooms giving presentations and lining up pilot programs for our real time analytics service publishflow™.
So of all the data in the census 2010, what are the three biggest challenges facing online publishers, with which they require help?
1. Mobile services development (51% of respondents)
2. Measurement of ROI (41% of respondents)
3. Database development and utilisation (40% of respondents)
This is a very good time to be a start up either looking to set up as an online publisher (maybe someday for us) OR to supply software and services to online publishers trying to take care of the three concerns above (today for us).
Hal Varian, Chief Economist at Google, has put together a solid summary of the current economic challenges facing traditional newspaper organizations.
You may have come across some of the data in bits and chunks over the past few months, but his slides consolidate what you need to know.
Depending on your position in the news space, you will have your own takeaways… my takeaways:
1. Online ad revenue for newspapers is only about 5% of total ad revenue - imo big upside for news publishers to pull ad budgets online. Can they do it? So far it’s not happening.
2. Time spent reading (scanning) online news is about 1 minute per day for the average person - imo most people are reading during the day while at work for a quick hit, but sites are still repackaged newspapers not intended for a quick hit experience.
3. Leisure reading happens weekends and outside of work hours while people are on the move - imo newspapers should double down fast and start creating the next “weekend” reading experiences for tablet and mobile devices.
4. 14% of costs as a percentage of revenue are from editorial activities - imo this is the shining light for the future of media and in particular news. 86% of costs as a percentage of revenue for newspapers are NOT related to content creation, drop that anchor and you have a whole new economic reality for news distribution.
I remember a conversation I had about 5 months ago with a former online editorial director of one of the UK’s big four newspapers…
me: “what does your ideal news organization look like?”
him: “Small office with cheap rent. 6 guys. 3 editors, 2 programmers, 1 sales guy. Outsource all content creation to freelance text, audio and video journo’s. Start with mobile content creation first and work backwards to the desktop browser if we even make it there.
me: “as long as all of you are analytics guys as well and using our publishflow™ analytics service, I am on board”
Enough from me, let’s hand the floor over to Hal Varian from Google…
It is one of the first semi-mainstream articles I have come across that deconstructs an article into a collection of assembled words. And in the authors opinion, all too often articles have way too many words that do not add any value to the story at hand.
The value of a word, a collection of words, an article and even a publication is in the eye of the beholder, so I am not going to rehash this authors take on things. You can read the article and see some interesting examples he uses of wasted words.
What I would like to highlight is the last passage of the article, which in my opinion addresses the actual business case of deconstructing stories using the “cost of words” (measurable) versus the “value of words” (subjective).
“On the first day of my first real job in journalism—on the copy desk at the Royal Oak Daily Tribune in Royal Oak, Michigan—the chief copy editor said, “Remember, every word you cut saves the publisher money.” At the time, saving the publisher money didn’t strike me as the world’s noblest ideal. These days, for anyone in journalism, it’s more compelling.”
It is interesting (for me at least) to think of news publishers as speculators whose job is to invest in words. Sometimes you go long and sometimes you go short. The trick is to be long or short on the right things. Whether investor or publisher, that challenge remains.
Most of the newsrooms we work with are using traditional web analytics services like Omniture, Webtrends and Google Analytics to quantify their traffic and page impression stats on a daily, weekly and monthly basis. Nothing shocking here, pretty much par for the course.
But it is rare that we see newsrooms really studying their analytics data on an hourly or daily basis to uncover new insight about visitor behaviour, story preferences and overall engagement with authors. There is a ton of information trapped in traditional web analytics packages that can help newsrooms become more efficient and make more money.
It has long been our vision at Kontexto, that newsrooms will need to start using traditional ‘return on investment’ business metrics for every story they create. Like every other business that makes decisions based on future returns, newsrooms can be no different if they wish to survive.
Companies like Demand Media, Huff Post and others are onto this, but AOL is the first big media brand embracing this approach and you can get up to speed on it in a brief, but timely article from Businessweek ‘AOL Moves to Build Tech ‘Newsroom of the Future’… CEO Tim Armstrong deploys software that helps journalists collaborate on articles readers seem to want, then reports the traffic they generate.
They are using stats, stats and more stats to determine what topics, stories and authors are successful over time. But more importantly, it uncovers what is not working over time so adjustments can be made.
“ROI”, “efficient allocation of resources” and “market driven story creation” may seem cold and dry, but I want as many newsrooms as possible to be around 3, 5, 20 years from now and using stats to help make sure this happens is something we (and AOL and a growing list) believe in.
Watch out for a big transition to data driven reporting in the coming years. Can’t wait.
Slowly, the winds of change are blowing into newsrooms around the globe.
20minutos.es, a popular Spanish language news website has just hired a full time home page editor “Portadista” that is responsible for the performance of the home page and tracking the most popular stories in each column, using their own software to show real time performance stats.
It may seem like a mundane role, but one that will become the most coveted job in newsrooms around the world in the next few years. The one person that is making decisions in real time about which content gets high visibility and using click data to verify those decisions.
In our discussions with newsrooms of all sizes over the past 12 months, it is clear there is a large market demand for real time data that can direct editorial choices, optimal link placement and measure real time story performance metrics.
The only thing that has been slowing adoption down is the lack of software to do this at scale (this is where our real time web analytics service buzzflow™ comes in) and hiring the proper staff to manage real time editorial management on websites. Both of these things are changing quickly.
I managed to find a fuzzy screen cap of what seems to be a one hour view of link performance on the home page of 20minutos.es. You can see the head and long tail of links and images that were clicked on and in what amount over the course of 60 minutes.
Real time data driven newsrooms are here to stay and this is going to be a very exciting space to play in for content and analytics freaks such as ourselves. Plus, who wouldn’t want the job title of “Portadista” on their business card, way cooler than mine.
I was meeting with the folks at The Guardian a few days ago and an interesting question was thrown out on the table asking if the presentation of online news can provide a competitive advantage over time. This could be quantified in several ways including attracting new users, longer time spent on site, more click throughs on articles or higher ad payouts for new layouts.
The main concern was that even if money and time is invested in coming up with new and innovative ways to present online news, it is so easy to copy, that the advantage would be short lived. What is more valuable investing in content creation or content display?
They are one in the same in my opinion and both have to be brilliant to win.
My feeling is that innovative news displays are mandatory to differentiate content and engage users. Good ideas will always be nabbed, copied and most of the time improved upon. But that is the nature of service innovation and not doing something new for fear of it being copied means you will just miss out on delivering new readership opportunities. Some that will suck and some that will work.
I am going to use the New York Times Skimmer service as an example of an offering that attempts to display the same underlying article set in different ways. Although there are 7 unique displays for the Skimmer service, three somewhat unique ones are shown below using the Dealbook blog content:
OK, so 8 hours later from the last blog post 80% of US Consumers Won’t Pay For Online News The Boston Consulting Group has entered the ring to declare that “Most” are willing to pay for online news.
“Most” = sub 50% of Brits and Yanks, but as a standard unit of measurement “Most” is open for interpretation of course. But, we have to throw all the data possible on the table.
At this point I have only one question to put me at ease, would Rupert Murdoch pay for online news?
