Monday, July 05, 2010

Media Week (Vol 3) 27: Economist Issue, Newspapers, Pixar, Copyright, Internet Retailing, Price or Scale

A backlog of Economist issues has resulted in the following "Economist Issue" of my weekly review.

An obituary of author Martin Gardner who died on May 22nd (Economist)
Yet he was far more than a synthesiser. Indeed, all his non-fiction—he also wrote novels, short stories and poetry—was rigorously analytical. And though he was shy, usually shunning his fans’ two-yearly “Gatherings for Gardner”, he was not afraid to speak his mind. Any beliefs he thought pseudoscientific, such as homeopathy, Scientology, creationism, anthroposophy, spoon-bending, astrology and flying saucers, he would dismiss with cool efficiency. Other ideas, such as Ronald Reagan’s beloved Laffer curve, were derided in spoof articles: Mr Gardner had a sense of humour, and used it to effect. But he was not malicious. Though he enjoyed hoaxes, he would sometimes turn them on himself, once writing, under a pseudonym, a withering review of one of his own works in the New York Review of Books.

Did he spread himself too thin? It is hard not to think that anyone who writes more books (70-plus) than many people have read, as well as numberless articles and essays, must be at the controls of a sausage machine, yet the sausages were usually good. The harder question is where it all came from, to which the only answer is himself—and reading.

The strange survival of ink - speaking of newspapers from June 12 (Economist):

That emphasis on giving readers what they want to read, as opposed to what lofty notions of civic responsibility suggest they ought to read, is part of a global trend. Newspapers are becoming more distinctive and customer-focused. Rather than trying to bring the world to as many readers as possible, they are carving out niches. Proprietors and editors are trying to identify distinctive strengths and investing what money they have in those areas.

In America many newspapers have plumped for local news and sport, leaving everything else to bigger outfits or to wire services like The Associated Press. Several of them now refuse to deliver papers to readers far from the urban core. Such readers are expensive to reach and less alluring to advertisers. Papers are also courting small local businesses with technology that allows them to design their own ads cheaply. In short, metropolitan newspapers are turning into city newspapers. That may help them in the long term. Jim Chisholm, a newspaper analyst, points out that small local papers have fared better than larger regional ones in many countries, including America.

An interesting article about Pixar and planning for the future (Economist):

Pixar’s approach to creativity is striking for two reasons. The first is that the company puts people before projects. Most Hollywood studios start by hunting down promising ideas and then hire creative teams to turn them into films. The projects dictate whom they hire. Pixar starts by bringing in creative people and then encourages them to generate ideas. One of its most successful recruits has been Brad Bird, who has presided over two Oscar-winning feature films, “The Incredibles” (in which he also provided a character’s voice) and “Ratatouille”.

The second is that the company devotes a lot of effort to getting people to work together. In most companies, people collaborate on specific projects, but pay little attention to what’s going on elsewhere in the business. Pixar, however, tries to foster a sense of collective responsibility among its 1,200 staff. Employees show unfinished work to one another in daily meetings, so get used to giving and receiving constructive criticism. And a small “brain trust” of top executives reviews films in the works.

A look at the Apps market: Apps and Downs (Economist):

As this is all part of the ongoing “platform war” between different mobile operating systems, the numbers should be taken with several grains of salt. The more the numbers are puffed up, not least with some double-counting, the more users and developers the respective app stores hope to attract. Ilja Laurs, GetJar’s chief executive, admits that his tally includes different versions of the same software—because this is industry practice. What is more, many apps are the mobile equivalent of marketing: they are given away to tout other wares. On June 15th Apple even released an app that lets users order the latest version of its own iPhone. Others apps are labours of love that have been put out free by passionate developers.

Nevertheless, research firms are trying to measure the market with tried and tested methods, sensing there are lucrative reports and consulting services to sell. In a recent study Juniper Research put last year’s revenues from mobile apps at nearly $10 billion and estimated that it will more than treble by 2015. Yet such figures are educated guesses at best, argues an analyst with a rival market-research firm which has refrained from making predictions of its own because of the paucity of data.

Can booksellers learn anything from Uniqlo? (Economist):

Fast Retailing also has a distinctive business model. Zara and H&M bring the latest fashions to the masses quickly, ordering new lines many times a year. Fast Retailing, by contrast, sells only around 1,000 items, far fewer than its rivals, and keeps them on the shelves longer. “We don’t want to chase after ‘fast-fashion’ trends,” explains Mr Yanai. This lets Fast Retailing strike lower-priced, higher-volume deals with suppliers (most products cost $10-20) and makes managing inventory a much simpler and cheaper affair.

Uniqlo makes up for the narrowness of its offering by selling the same item in many colours: socks come in 50 hues at its flagship store in Tokyo. Such basics, the firm believes, have the added benefit of appealing to a wider audience than the preppy Americana sold by Gap or the faddish wares of Inditex and H&M.

Owning the news: Copyrighting facts as well as words (Economist):

FACTS, ruled America’s Supreme Court in 1918 in the “hot news doctrine”, cannot be copyrighted. But a news agency can retain exclusive use of its product so long as it has a commercial value. Now newspapers, fed up with stories being “scraped” by other websites, want that ruling made into law.

The idea is floated in a discussion document published by the Federal Trade Commission, which is holding hearings on the news industry’s future. Media organisations would have the exclusive right, for a predetermined period, to publish their material online. The draft also considers curtailing fair use, the legal principle that allows search engines to reproduce headlines and links, so long as the use is selective and transformative (as with a list of search results). Jeff Jarvis, who teaches journalism students to become entrepreneurs at New York’s City University, says this sounds like an attempt to protect newspapers more than journalism.

The click and the dead: E-commerce favours large companies but only because that is what people want (Economist):
Everywhere people bemoan the replacement of the local and the quaint by outposts of big, homogeneous chains. But how true is the notion that the internet in particular has hastened the demise of some retailers, and that those it hurt were overwhelmingly small? A new study* on this subject by four economists at the University of Chicago looks at three industries—bookshops, travel agencies and new-car dealerships—for answers. They find much truth in the conventional wisdom, but also some solace for those who believe small is beautiful.
The study finds evidence for this, too. Among booksellers, all the smaller categories withered in the internet age—save one. The lone exception was the very smallest, shops with between one and four employees. These appeared to have weathered the storm unscathed: in Harvard Square itself, Curious George, a children’s bookshop run by the same people who owned WordsWorth, flourishes to this day. The internet allows customers to see businesses’ true colours. The adjustment that follows may be wrenching. But the net effect is one that conforms to what consumers want, whether they admit it to themselves or not.
Media's two tribes: Scale or pricing? (Economist):

Paywalls are rising across the media landscape as many firms conclude that revenue from online advertising alone is not enough to make ends meet. The Tallahassee Democrat, a newspaper owned by Gannett, starts charging from July 1st. Hulu, a free video website that was launched in America in 2008, said this week that it would begin selling subscriptions.

Yet there is a strong drift in the opposite direction, too. For every outfit that is trying to build a premium subscription service, another is becoming more convinced of the virtues of giving away free content.

Britain’s Daily Mail newspaper, for example, is something of an anti-Times. Its website, which is heavy on pictures and celebrity news, has grown rapidly in the past two years, both at home and abroad. It had 42m unique monthly visitors in May, according to the Audit Bureau of Circulations—more than any other British newspaper website. Martin Clarke, who runs the Mail’s website, reckons people simply will not pay for general news on the web, and is happy to maximise viewers and advertising. The model of giving away content is not broken, he says: “It’s only broken if you are not big enough.”

This is not merely a difference of opinion over whether to charge for online content. It is a divide between a strategy based on “up-selling” people to premium subscriptions, and a strategy based on scale and market-share. More fundamentally, it reflects different views about the extent to which consumers can be steered towards the most profitable products.

From the twitter this week:

China E-Book Firm Challenges PDF InformationWeek Just what we need.

My US orphan estimate cited in Euro Orphans Report But spelled blog name incorrectly. My report.

Digital Magazines Don’t Encourage Socializing - NYT

Tech Trends: Ereaders, Mobile Devices, and Cloud Computing Library Journal

David Rothman on the iPad Stimulus Plan The Atlantic

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