In­dus­try In­sights from Mathew In­gram

The Insider - - CONTENT -

In plan­ning for our Jan­uary edi­tion of The In­sider, my ed­i­to­rial team wanted to bring per­spec­tives and pre­dic­tions of some of the most in­sight­ful an­a­lysts and writ­ers in the in­dus­try to the is­sue.

I’ve been fol­low­ing Mathew In­gram’s work for years and have huge re­spect for his work.

His in-depth anal­y­sis and re­fresh­ing “call it as I see it” com­men­tary on the state of the pub­lish­ing in­dus­try made him a must-have ad­di­tion to the mag­a­zine.

I’m de­lighted Mathew ac­cepted our in­vi­ta­tion and strongly urge you to check out his in­ter­view. Some of what he says may sur­prise you, some may even shock you, but I guar­an­tee you, what he says will never bore you. En­joy!

NIKO­LAY MALYAROV Mathew, thanks so much for be­ing with me to­day. I’m ex­cited to hear your views on some of the most press­ing is­sues fac­ing our in­dus­try. Let’s start with the paid ver­sus free con­tent de­bate. It con­tin­ues to rage with pub­lish­ers rush­ing to post their con­tent on Face­book In­stant Ar­ti­cles, Ap­ple News, Snapchat and oth­ers in the pur­suit of eye­balls and ad rev­enue. What are your thoughts on this trend?

MATHEW IN­GRAM Part of what made me­dia pow­er­ful in the past was their con­trol over the dis­tri­bu­tion chan­nels through which peo­ple got their con­tent. The printed news­pa­per, the ra­dio sta­tion, the TV chan­nel were some­what ver­ti­cally in­te­grated. Pub­lish­ers pro­duced the con­tent and also con­trolled the dis­tri­bu­tion chan­nel through which peo­ple dis­cov­ered and re­ceived their con­tent.

Now it’s all be­com­ing un­bun­dled. Me­dia com­pa­nies con­trol what they cre­ate but they no longer con­trol one of the ma­jor ways that peo­ple get their con­tent, which is through so­cial plat­forms like Face­book and Twit­ter and Snapchat and half a dozen oth­ers. Face­book has a huge au­di­ence and huge reach. It can get your con­tent in front of or­ders of mag­ni­tude more read­ers than you could ever do your­self. If you are in­ter­ested in broad­en­ing your reach, Face­book is a nat­u­ral way to do that. It’s free and in some cases it can ac­tu­ally make you money. That part is very ap­peal­ing.

I think the risk is that you give up so much con­trol over your con­tent and you give up a fun­da­men­tal re­la­tion­ship with your au­di­ence. If you be­lieve, as I do, that the re­la­tion­ship with your au­di­ence, with your read­ers, is your fun­da­men­tal value then in­sert­ing Face­book as an in­ter­me­di­ary means that some of that value ac­crues to Face­book, not to you.

One corollary of that is, be­cause Face­book has an al­go­rithm that de­ter­mines when spe­cific con­tent is shown to spe­cific users, you’re at Face-

book’s mercy ef­fec­tively. They can con­trol that al­go­rithm in what­ever way they wish. They can make your con­tent eas­ier to find or harder to find. They can show it to more peo­ple or fewer peo­ple and you have lit­er­ally zero con­trol over that.

NM What are your thoughts on the paid con­tent mod­els such as pay­walls, which seem to be go­ing up and down like yo-yos?

MI My thoughts in gen­eral are pay­walls around a mass of un­dif­fer­en­ti­ated con­tent will not work to a large ex­tent. You may get some in­cre­men­tal rev­enue. You see a lot of news­pa­pers do­ing that. They get in­cre­men­tal rev­enue but they don’t get large amounts of rev­enue, un­less they’re The New York Times, which of course vir­tu­ally no one is, ex­cept The New York Times.

I think pay­walls and sub­scrip­tion mod­els and charg­ing read­ers di­rectly is a great strat­egy. The only prob­lem is that you have to plan it very care­fully be­fore you do it. You have to think about what im­pact that’s go­ing to have on your model be­cause that model only works if you are of­fer­ing some­thing very, very spe­cific and tar­geted and fo­cused on a spe­cific mar­ket. The ones that you see work­ing the best are ones where you can’t get that con­tent any­where else, so prod­ucts like the Fi­nan­cial Times and the Econ­o­mist work well be­cause the in­for­ma­tion is so valu­able.

If you’re a mass-mar­ket, gen­eral-in­ter­est news­pa­per that

prints largely com­modi­tized news, then a pay­wall is a re­ally dumb idea. It may get you a lit­tle bit of ex­tra rev­enue but it’s not go­ing to solve the larger prob­lems. As a re­sult, we’ve seen even The Sun in Lon­don get rid of its pay­walls.

The prob­lem with me­tered pay­walls like The New York Times is that you’re ef­fec­tively try­ing to suck and blow at the same time. You have a pay­wall to gen­er­ate rev­enue but you also want lots of peo­ple to get your con­tent for free. What you end up do­ing is ac­tu­ally pe­nal­iz­ing your most loyal cus­tomers and giv­ing non-loyal read­ers stuff for free - which is, if you think about it, the op­po­site of what you should be do­ing.

NM Very good point. What about some of the paid con­tent ag­gre­ga­tors?

MI Let’s look at Blen­dle, which some call the iTunes for news. I think Blen­dle is great and I’m a big fan of Alexan­der Klöpping and his team. They’ve done a great job of build­ing that com­pany. The prob­lem is I don’t think Blen­dle is go­ing to have the suc­cess in English­s­peak­ing mar­kets as it’s had in the Nether­lands and Ger­many, sim­ply be­cause the English­s­peak­ing mar­ket has oceans of free con­tent. If you are in a ge­o­graph­i­cally and lin­guis­ti­cally sep­a­rate mar­ket, pay­wall strate­gies of­ten work bet­ter be­cause to some ex­tent that con­tent is unique be­cause it’s in a spe­cific lan­guage. We’ve seen sim­i­lar suc­cesses in Que­bec, in Canada, for the same rea­son. I don’t think those mod­els trans­late as well to an English­s­peak­ing mar­ket sim­ply be­cause there’s so much free com­pe­ti­tion.

Lots of peo­ple are will­ing to pay for Spo­tify, they’re will­ing to pay for iTunes and they’re will­ing to pay for Net­flix but the con­tent that news­pa­pers and mag­a­zines pro­duce is fun­da­men­tally dif­fer­ent.

Lots of peo­ple will watch the same movie or the same TV shows or lis­ten to the same song over and over. There’s a very dif­fer­ent re­la­tion­ship with that type of con­tent than there is with news. News is fun­da­men­tally fun­gi­ble. There’s some unique con­tent with some of me­dia plat­forms but not enough to make it work.

One of the mod­els I re­ally like is the one De Cor­re­spon­dent uses in the Nether­lands. They have a great reader-fo­cused strat­egy which has re­sulted in a sub­scriber base of over 40,000 mem­bers.

NM Let’s move on to the changes in news dis­cov­ery and con­sump­tion. Can the so-called “snack­ing gen­er­a­tion” co-ex­ist with se­ri­ous jour­nal­ism?

MI With Face­book, Twit­ter, Snapchat or Instagram the con­tent is so dif­fused that peo­ple en­counter it in all kinds of ways while they’re do­ing other things.

Face­book is a huge source of news for large num­bers of peo­ple, but they don’t go there to get news. They go there to do other things and they ac­ci­den­tally dis­cover news. That’s a very dif­fer­ent kind of con­tent ex­pe­ri­ence than, “I want some news so I will read this thing or watch this pro­gram.”

A former boss of mine would say it was like rip­ping up your news­pa­per into pieces and then throw­ing it into the wind. You never know who’s go­ing to see which piece or where and what they’re go­ing to think about it. It won’t be con­nected to any­thing else; it’ll just be all by it­self.

Peo­ple glanc­ing-ly run into these news bits that are float­ing around in the at­mos­phere and there’s very lit­tle con­text and very lit­tle back­ground. They may see a head­line, they may see a short video clip, they may read a cou­ple of sen­tences. There’s a lot more ac­ci­den­tal, shal­low in­ter­ac­tion with news.

NM The se­ri­ous jour­nal­ism side of the equa­tion, how do we get this au­di­ence to en­gage more with that?

MI I think lots of se­ri­ous news out­lets are try­ing to clothe their con­tent in ways that are ap­peal­ing to that type of user, whether it’s head­lines or an­i­mated GIFs or things that make it seem more ap­peal­ing to peo­ple who are wan­der­ing by. I think in some ways that ac­tu­ally works against you. If you have a long, se­ri­ous piece of jour­nal­ism and you’re try­ing to put lip­stick on it and make it look like some­thing it’s not, peo­ple can ac­tu­ally feel ex­ploited.

Maybe I’m an op­ti­mist, but I do think that peo­ple, maybe not lots of peo­ple, but still, there are peo­ple who want depth and con­text and anal­y­sis and they care about things are se­ri­ous and pos­si­bly even bor­ing. I don’t think ev­ery­body wants to just con­sume a kind of fast food diet of made up celebrity news.

NM Okay, let’s move on to the ad­ver­tis­ing world a lit­tle bit. It seems to be the hottest topic these days with ad block­ers, pro­gram­matic, na­tive ad­ver­tis­ing, mo­bile and video. Are we at an op­por­tunis­tic point right now or are we slid­ing down a slip­pery slope of fur­ther re­duc­tion of rev­enue for pub­lish­ers?

MI Fun­da­men­tally what we’re talk­ing about is a dis­rup­tion of the way that ad­ver­tis­ing works, pe­riod. I think it’s hap­pen­ing ev­ery­where. It’s not just print, although it’s more ob­vi­ous in print. In a lot of ways, me­dia is go­ing through two fun­da­men­tal dis­rup­tions.

The first one is the dis­rup­tion in the con­tent it­self – that is, the jour­nal­ism or the news and how it’s pro­duced, how it’s dis­trib­uted and how it’s con­sumed.

The sec­ond dis­rup­tion is in the thing that used to pay for that con­tent, which was the ad­ver­tis­ing. That, like ev­ery other form of con­tent, is be­ing dis­rupted as well.

Me­dia com­pa­nies are ef­fec­tively go­ing through two per­fect storms at the same time. One in the thing they do and the other in the way they used to pay for that thing.

I think ad-block­ing is like a sneeze. It’s not the thing. It’s a symp­tom of the thing. The larger phe­nom­e­non is that ad­ver­tis­ing is chang­ing. Pro­gram­matic ad­ver­tis­ing, in­vented by Google and other com­pa­nies, is driven by al­go­rithms and bots and is al­most 50% of the mar­ket; hu­man be­ings are never in­volved. And now that busi­ness ef­fec­tively func­tions on its own be­cause it’s so much more ef­fi­cient, where ef­fi­ciency in many cases con­sists of get­ting rid of hu­man be­ings.

I think what you’ve seen is ad­ver­tis­ers and pub­lish­ers get­ting in­creas­ingly des­per­ate to squeeze what­ever tiny sums of rev­enue are left from tra­di­tional forms of ad­ver­tis­ing. You see pop-ups and in­ter­sti­tials and videos and ev­ery other thing, and fifty or sixty dif­fer­ent track­ers on a sin­gle page and all sorts of fraud and garbage be­cause there’s a lot of des­per­a­tion out there.

I hap­pen to be­lieve that na­tive ad­ver­tis­ing or spon­sored con­tent is just about the only kind of ad­ver­tis­ing that has any hope of ac­tu­ally work­ing, apart from what you might call branded aware­ness-based ad­ver­tis­ing. If you’ve got a new movie com­ing out and you want to splash stuff about that movie ev­ery­where, then dis­play ad­ver­tis­ing might be use­ful to you. But for the vast ma­jor­ity of mar­ket­ing/ad­ver­tis­ing, na­tive ad­ver­tis­ing is one of the few types of pro­mo­tion that still hold the prom­ise of ac­tu­ally work­ing be­cause it the­o­ret­i­cally re­lies on turn­ing ad­ver­tis­ing into con­tent.

I think that’s where you get into some of the eth­i­cal de­bates. If it mim­ics con­tent well enough then peo­ple can for­get that it’s ad­ver­tis­ing.

That’s why it works. You have to be very care­ful how you do that be­cause of the risk that you will trick some­one into be­liev­ing that it’s ed­i­to­rial con­tent.

NM There’s been a lot talk and con­tro­versy about jour­nal­ists be­ing asked to write spon­sored con­tent. The Globe and Mail ended up in al­most a lock­out sit­u­a­tion last year when they told their ed­i­to­rial team that they would be ex­pected to cre­ate na­tive ad copy. What are your thoughts on jour­nal­ists writ­ing spon­sored con­tent?

MI I think it’s in­ter­est­ing that if you look at the those who have got­ten into trou­ble over this is­sue, it’s al­most al­ways the tra­di­tional me­dia com­pa­nies. New me­dia com­pa­nies like Buz­zFeed ac­tu­ally have a very firm, so-called Chi­nese Wall be­tween their busi­nesses. I find it ironic in a way, that the com­pa­nies that are sup­pos­edly the stan­dard-bear­ers for all those tra­di­tional jour­nal­is­tic, eth­i­cal prin­ci­ples are the ones that are throw­ing them out the win­dow in or­der to get ad rev­enue, which I think just speaks to the des­per­a­tion that they’re feel­ing. I think if you use your reg­u­lar ed­i­to­rial staff, you’re blur­ring the line and mak­ing it harder for your read­ers to trust you.

Fun­da­men­tally it comes down to trust. Craig New­mark, the founder of Craigslist, said that “Trust is the new black.” If you’re ask­ing your read­ers to sup­port you in some way, ei­ther per­son­ally or through a sub­scrip­tion, you’re ef­fec­tively mon­e­tiz­ing their trust. If you play around with that, it’s very easy for peo­ple to lose trust and it’s al­most im­pos­si­ble to get it back. You can’t say, “You know, we changed our mind and sorry about that. We’re not go­ing to do that any­more so please trust us.” Trust is very easy to lose and very dif­fi­cult to get back.

NM As a jour­nal­ist who has lived through the dis­rup­tion in this in­dus­try, what do you think jour­nal­ists are go­ing to look like in five years?

MI We’re al­ready see­ing en­trepreneurs ei­ther through in­di­vid­ual ef­forts or small groups of like-minded jour­nal­ists. Jessica Lessin’s The In­for­ma­tion is a good ex­am­ple. I don’t know how it’s do­ing fi­nan­cially, but I think that idea of tak­ing a small team and fo­cus­ing on a spe­cific type of con­tent and go­ing di­rect to your reader makes a lot of sense. An­drew Sullivan ar­guably did that with The Daily Dish. He had forty thou­sand sub­scribers by the time he shut it down. Brian Lam has a site called The Wire­cut­ter which has a very lean or­ga­ni­za­tion that makes sig­nif­i­cant sums of money with very tar­geted con­tent. You’ve got Skift, which is all about travel. Ben Thomp­son who writes a tech anal­y­sis news­let­ter called

Strat­e­ch­ery is ba­si­cally a one man op­er­a­tion that runs a sub­scrip­tion news­let­ter. I’m pretty sure makes he a pretty good liv­ing. John Gru­ber who writes Dar­ing Fire­ball is a sim­i­lar type of model.

I think those types of tar­geted, fo­cused ef­forts can do very well.

NM Given ev­ery­thing we’ve talked about to­day and Ross Daw­son’s pre­dic­tions of the death of printed news, are we get­ting there faster be­cause of some of these dis­rup­tions in ad­ver­tis­ing and mon­e­ti­za­tion mod­els? Or do you think he’s overly ag­gres­sive on his pre­dic­tions?

MI I ac­tu­ally think print is prob­a­bly go­ing to con­tinue to ex­ist longer than peo­ple think, but ob­vi­ously not all of the print out­lets that we’re used to. I think there’s prob­a­bly go­ing to be peo­ple who want print of some form or another for the next, I’d say, twenty years at least. It’s just that there’s go­ing to be fewer and fewer of them. Some pub­lish­ers won’t be able to make it be­cause they need more scale than their print-fo­cused au­di­ence can of­fer.

My anal­ogy has al­ways been live the­ater. Live the­ater used to be a pretty sub­stan­tial form of en­ter­tain­ment; in fact it was the lead­ing form of en­ter­tain­ment at one point. It was a big busi­ness. Peo­ple still go to

the the­ater but not that many of them. To­day, it’s not a very good busi­ness. There aren’t many peo­ple who can make a liv­ing at it, but it’s not go­ing away.

I think Jeff Be­zos com­pared it to horse­back rid­ing. Horses used to be a fun­da­men­tal mode of trans­porta­tion. Ev­ery­body had one or two. Peo­ple rode them ev­ery­where. It was a big in­dus­try. Peo­ple still ride horses but it’s a much more niche in­dus­try now and it’s much more ex­pen­sive.

NM Where do you think wear­ables and the In­ter­net of Things fit into the pub­lish­ing world go­ing for­ward over the next five to ten years?

MI I think there’s a huge amount of po­ten­tial there, maybe not for the watch. I’m not sure that’s the right form fac­tor for a lot of things other than maybe a news alert about a fire or an ex­plo­sion or some­one dy­ing. That’s a very, very small sub­set of the news. I do think that wear­ables in gen­eral and al­ter­nate dis­play tech­nolo­gies are fas­ci­nat­ing.

The New York Times lab has a demo of a news dis­play that’s built into your mir­ror in your bath­room. It pulls up the weather and the news head­lines and so on while you’re brush­ing your teeth and shav­ing. Those types of things, I think, are a mas­sive un­tapped area for po­ten­tial de­liv­ery of news or other types of con­tent.

I do think that we’re go­ing to see more ex­per­i­men­ta­tion around things like Google Glass. Maybe not glasses per-say, but some type of vis­ual dis­play that shows you in­for­ma­tion about the world around you.

NM That’s very in­ter­est­ing be­cause in that ex­am­ple you just gave, it’s about the reader, not about the con­tent. As the user moves, the con­tent changes.

MI That’s a re­ally great point. I would ar­gue that me­dia com­pa­nies that are more likely to be suc­cess­ful are the ones that are go­ing to fo­cus ex­clu- sively on the user and what they want or need. It will be those that think of what they do as a ser­vice to a user or a spe­cific mar­ket, not as just a ma­chine that pumps out con­tent that is then con­sumed in some the­o­ret­i­cal way by some the­o­ret­i­cal group that will suc­ceed.

NM Ev­ery year is the year of some­thing. What do you think 2016 will be the year of for pub­lish­ing?

MI Con­tin­ued anx­i­ety? I think we’re go­ing to see more con­cern about plat­forms. Even the kind of angst we’ve seen so far is go­ing to pale in com­par­i­son as you see Face­book get­ting deeper in the news, Ap­ple in the news, Snapchat, Instagram and plat­forms that we prob­a­bly don’t even know about.

They are con­tin­u­ing to gain power and me­dia com­pa­nies are con­tin­u­ing to lose it. That’s a fun­da­men­tal kind of power shift that I think is only go­ing to in­ten­sify.

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