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Terry Heaton

So you’ve got a TV station or radio station or newspaper with all this good “content.” The cost of producing it is already sunk so you put it on your website and sell some banner ads. Ch-ching. But it just isn’t working for a lot of “legacy media” and Terry Heaton explains why:

“The assumptions of any content play are that its value is so great that expensive, adjacent advertising will support it and that the mass attractive to advertisers can be created through scarcity. Neither of these assumptions is viable online, and the real problem is that both must be present for significant revenue to be realized.”

So what do we do?

“We should nurture our legacy products as best we can, but we simply must separate our ability to make money from our dependence on the content we create. The key to that is in defining, understanding and developing the Local Web.”

I added the bold in hopes that would help me understand what he’s saying. I think he’s referring to the content we are already creating. We have a story in the paper, we put it on the web. We have a good radio morning show, we stream it. And so on.

We can’t just “re-purpose” our existing content and expect to attract an audience that will be attractive to an advertiser. I think he’s right.

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I’ve been doing some work on the website of one of our networks and came across a story about what appears to be a big music festival. I exchanged some emails with the news director about linking and adding content from other sources (Google, flickr, YouTube, blogs, Twitter, etc). She expressed some concerns about this.

She, like some many veteran reporters I know, seemed to be coming from that place where you write your story (with audio/video/stills) and it goes into whatever distribution channel your company happens to own: paper, magazine, radio/TV station. That’s where her “audience” finds the story.

And it worked just fine for a long time. But then the web comes along and most of us clapped our hands because we saw it as just one more way to reach “our” audience. A one-way pipe from which they would “consume our content.”

From a recent post (“The Web’s Widening Stream“) by Terry Heaton:

“The “Browse” phase of the Web was its first, and it’s where the name of the desktop application known as the browser originated. The Web was seen as a series of roads leading to destinations, We hopped from site to site — or in the case of AOL, destinations within the site — and everybody was happy. “Visitors” to sites were welcomed through a front door, which became the most valuable online real estate in terms of advertising.

“Search” disrupted the paradigm by allowing people to access documents within a site without going through that front door. We were still visiting sites, though, because that’s “where” the content resided. Search destroyed the value of the home page, and also allowed for advertising adjacent to search results — a way of monetizing content that existed only in link form on the pages of the search. If you wanted to buy ads next to football content, you didn’t need to buy football pages, for example. You could simply buy ads on search results for football.

“Subscribe” blew everything apart, because users no longer had to even visit websites, assuming publishers were willing to make their content available in RSS form. Most major publishers refused to play the game, so media company RSS feeds have generally contained only a sentence or two, thereby forcing users back to the site of origin, where publishers can monetize pages. This irritating practice has kept publishers from exploring revenue possibilities in a truly subscriber-based environment, and it’s the key thing holding back the development of RSS.

But a new paradigm is threatening all of the others and will eventually force all publishers into the unbundled media world. The staggering popularity of social media messaging via Facebook and MySpace “status updates” and, of course, Twitter is creating an information ecosystem that is a series of real-time streams. These streams come in short bursts, but when added to the RSS of Microsoft’s “subscribe” phase of the Web, they form powerful, relevant and meaningful sources of knowledge and information for an increasingly networked world.

Mr. Heaton quotes (and links to) VC John Borthwick who views “streams” as the new metaphor for the web:

In the initial design of the web reading and writing (editing) were given equal consideration – yet for fifteen years the primary metaphor of the web has been pages and reading. The metaphors we used to circumscribe this possibility set were mostly drawn from books and architecture (pages, browser, sites etc.). Most of these metaphors were static and one way. The steam metaphor is fundamentally different. It’s dynamic, it doesn’t live very well within a page and still very much evolving.

A stream. A real time, flowing, dynamic stream of information — that we as users and participants can dip in and out of and whether we participate in them or simply observe are a part of this flow.

And then there is the advertiser:

“Advertising will be another fundamental part of the stream, but the rub for media companies is that advertisers can enter the stream themselves, without the assistance of being attached to media content. This is the inevitable end of a truly unbundled media world.”

If I started this post with a point in mind, I lost it along the way. I think it had something to do with the notion that a reporter –any reporter– could write/produce a story and expect others to find it and read it (and comment on it?) without being connected to them in some synchronous manner.

Or perhaps: All of us can tell the story better than any of us.

Whatever. Read Mr. Heaton’s piece.

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Terry Heaton on Field of Dreams and broadcasting.

“The geeks of the world built their own Field of Dreams years ago in this thing we call the World Wide Web, a disruption of Biblical proportions to the status quo. Like Busfield’s character, however, media companies walked right through it. We could see the playing field, but we couldn’t see the magical players. We scoffed and viewed it with contempt, because, after all, we are were “the media.”

Now is the season of our tragedy, and our eyes are suddenly opening. Let’s hope it’s not too late.”

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Like me, Terry Heaton wonders about the price of gasoline and finds truth in the movies:

“In the 1980 film “The Formula,” George C. Scott plays a detective who uncovers a plot to kill anybody with knowledge of a secret Nazi formula for a synthetic fuel. The bad guy in the film is Adam Steiffel, the Chairman of Titan Oil, played by Marlon Brando. The two meet on Steiffel’s patio, where the oil mogul is enjoying breakfast, and the scene produces a couple of memorable lines in a case of art imitating life. “You’re not in the oil business; you’re in the oil shortage business,” Scott says to Brando. An aide to Brando’s character races to the table with news of price activity by the Arab states, to which Brando’s character responds, “You idiot, we ARE the Arabs!”

Well, that would explain a few things.

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From latest Pew Research Center Survey:

“Currently, 40% say they get most of their news about national and international issues from the internet, up from just 24% in September 2007. For the first time in a Pew survey, more people say they rely mostly on the internet for news than cite newspapers (35%).

For young people, however, the internet now rivals television as a main source of national and international news. Nearly six-in-ten Americans younger than 30 (59%) say they get most of their national and international news online; an identical percentage cites television. In September 2007, twice as many young people said they relied mostly on television for news than mentioned the internet (68% vs. 34%).”

Radio gained a little ground (from September 2007 to December 2008) among young people (18-29), up from 13% to 18%.

In this essay, Terry Heaton argues that just surviving is not a strategy:

“This theme of surviving 2009 is everywhere, but I’d like to pose an important question for anybody so hunkered, hanging, waiting or rowing, because waiting it out assumes “it” will end and that there will be a reward for those who are still standing when “it” is over. I’m not so sure, so here’s the question: What if the old model is gone for good and it doesn’t come back?”

UPDATE 12/26/08: A number of folks have accuratelty pointed out that a LOT of the news on the Net comes from newspapers. Worth noting but doesn’t solve any of the problems facing newspapers. If it comes down to getting less news (volume and variety) online or buying a copy of the Daily Bugle, online is gonna win. Business models will evlove that will support quality reporting w/o the overhead of current publishing models.

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I don’t know if I enjoy reading Terry Heaton because he’s smart or because I usually agree with him. In his latest essay he looks ahead to what he believes are the real challenges for media companies in 2009. It’s a very hope filled essay. Here are a couple of my favorite graphs:

“Whereas the Industrial Age forced the creation of powerful city states (the labor force had to be centrally located), the Information Age allows us to be where we want to be. Watch for movement to friendly, peaceful surroundings, where the locals have been smart enough to build hubs along the information superhighway. Contrarians will argue that people working from home will be isolated, but from what? What new businesses will spring up to cater to American workers in the future?

Whereas the Industrial Age brought us corporate marketing, the Age of Participation heralds the world of personal marketing and personal branding and a time of influence in expanding circles, rather than top-to-bottom. The time to gain traction in this world is today, for today’s action will determine your place in tomorrow’s culture.”

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