Filtered

Digital lines in the sand

Time for a quick thought piece about one of our favourite subjects here at Filtered. There are two competing forces in the media business which seem completely at odds:

1. All content is a commodity.

2. We value content that is specifically relevant and meaningful to us.

Both those statements can evoke emotional and involved responses, so permit me to grossly simplify things for a moment.

The problem with commodity content is that from a business perspective, the margin pressure is constantly pressing downwards. The assumption is that over time, the cost of creating and publishing online content will continue to decline, and therefore associated marketing costs will either drop or the same dollar will go further.

To switch sides to the value we place on content as consumers and participants in the digital media landscape, there are times when something is so valuable, so important, that we actually want to pay for it. Think about magazines that you have intentionally subscribed to because you are passionate about that subject. Or conferences that you were happy to fork out big bucks for you because they promised to deliver knowledge, contacts, and hopefully business. Most of us are not accustomed to paying for niche content on the Internet. Speaking personally, I've spent money on the WSJ online, and a couple of other niche sites because I valued the content.

Chris Saad commented last month that we need to "start thinking niche", something I've done ever since I started my IT journalism career in the late 1990s at Network World Australia, a niche networking industry magazine which no longer exists. The reason for its demise was no great mystery - it no longer brought in enough advertising.

So my point is this: at some point, every content creator regardless of whether it is an individual or company needs to make a decision about what their time and efforts are worth. If you have decided that you will generate content for free, more power to you. But if through your writing you are hoping to make a living or build a business, you ultimately must consider what business model will apply.

Hypothetically, you could decide to finance your blog or content business using Google AdWords on the assumption that if you get regular links from Digg/TechMeme/TechCruch/Slashdot to drive traffic, you could make a few bucks. An assumption I have made, however, is that you are still participating in a system in which the margin model trends downwards. That is, I suspect Google is more likely to pay you less money per click over time, rather than more. Am I right?

On the other hand, if you created an online business which provided some level of qualification or filtering to participate in consuming the content (either paid or unpaid), you have the ability to create more value for an advertiser. Theoretically under this model, you can try and push the margins up. But I've not read comments from too many new media publishers outside the Fairfax's (particularly AFR.com - check out FBM decision to stop paying Factiva and AAP. They're charging $500 a month!! ** See correction below)of this world who are actively and openly trying to create value around content, and extract greater value from that content over time. The dominant meme in the blogosphere, it seems to me, is that we simply give away all our content, sign up to Google and cross our collective fingers. I've spent enough time around financial analysts to know that's not a business model people will support in the long term.

As I said before, if you are not trying to make money from content, none of this is an issue. But if you are, at some point you've got to draw a line in the sand. The big question is where exactly did you draw yours?

Update: The NYT is thinking similar thoughts about the scale needed to make money from a niche site, and there are some great ideas over at Publishing 2.0:

Is it possible that Google, the great driver of efficiency in online advertising — and the great democratizer of online ad revenue — has in fact dragged down the average value of ALL page views?

So what is online media to do? It already commands a third of total media attention, rivaling television, the ultimate monopoly medium. So why can’t websites charge monopoly prices? Well, the handful of big online media brands, like Yahoo, AOL, MySpace (homepage), MSNBC, CNN, etc. DO charge premium prices for their premium inventory. The top online destinations can and do price like high-priced offline media.

But for as the long tail — it just doesn’t scale.

Update 2*: I've been corrected on the pricing model from an internal source at FBM. The minimum spend is $25 per month, and that fee is waived if you are a subscriber. Pricing climbs to $150 per months for an advanced markets package.

Calling all Windows geeks

I'm trying to remember the last time a major product launch like Windows Vista and Office 2007 was met with such universal derision. I won't add to the chorus of yawns and "OSX did that first" comments. But I wonder, have we reached a tipping point where the cult of personality alone is not enough to sell boxes of Microsoft software?

Bill Gates took time out from his philanthropic duties to spruik the product around the world. And Steve Ballmer held court in New York City (see this Biz Week story). The media was always going to make a big deal about this -- no self-respecting IT journalist turns down an opportunity to interview or listen to either Gates or Ballmer. But outside that media bubble, you get the sense no amount of "wow factor" they generate can sway the average consumer to abandon logic and upgrade for the sake of it.

Consider the fact that thousands lined up at midnight to buy the Wii, PS3 and Xboxes around the world. Harvey Norman's midnight sales gig for Vista in Sydney apparently didn't get much more than 100 people. So the buzz differential between these different consumer tech launches is like night and day. People "needed" these cool consoles. They don't necessarily "need" Vista. And worst of all, where have all the Windows geeks gone? Amazing.

Update: I found a few! My colleague Joshua Gliddon pointed me to Jim Allchin's blog (who left Microsoft post Vista launch as promised).

Crossroads for Christmas

Hey folks. I'm on holidays. After a big year, I'm taking a three week break and I'm loving it already.
So what's the Jones Family doing this Christmas/New Year season? Yours truly flexed his web-savvy fingers and found some relatively inexpensive flights to Hong Kong. We're off to see my sister and bro-in-law who've been working as volunteers at Crossroads (think humanitarian eBay) for about 5 years -  we're waaay overdue for a visit. My sister is talking about getting us involved in these life experiences she runs called "Slum Survivor" where you experience poverty first hand. That's a change from the newspaper business, to say the least.

The tech side of the story (there always is) is that I managed to find the cheapest flights on webjet. The next step was to take that quote to the bricks-and-mortar Flight Centre which promptly undercut the price by $40. Yes, I do love the Internet. Sure, that's not a massive saving, but they did spend a few hours with us in person checking alternatives and seating etc. so I reckon that's value.

Enjoy the break if you're getting one, and Happy Christmas.

Windows Depression

Microsoft will tell you that Vista contains code that limits the number of times the OS can be installed on a different hard disk to cut down on piracy. According to this yarn, Vista will also keep tabs on hardware changes to your PC, such as the motherboard, and aims to make this "feature" less of a headache than XP.

That's all very interesting, but I was more intrigued by the contextual ad that Google inserted above the copy. Windows Vista = depression? Heh.

 

Ruthless personal honesty

Graeme Wood, CEO of the latest Australian tech IPO sensation Wotif.com, was good enough to sit down for a yarn with yours truly for an article I'm preparing for AFR Boss.

He's a rare animal among the bosses of ASX-listed Australian CEOs in that he speaks his mind, and doesn't recite from memory carefully prepared remarks penned by PR people. In fact, on the two occasions we've talked so far, there wasn't a PR person in sight, but I digress.

The subject was leadership, and taking a risk in business. How do you know if you're making the right decision or not?

"It's about ruthless personal honesty," he says. "If you are kidding yourself, you are gonna try and kid other people. If you are not kidding yourself you are off to a good start."

Obvious, perhaps. But very insightful considering he's the boss of an internet company that doesn't care about Web 2.0, SOA, XML, AJAX, blogs, or podcasts, or whatever's big on Techmeme right now. The Internet is a delivery channel for his online accomodation business. The means to an end. Business before technology, not the other way around. And before you get too excited about that being an invalid opinion - consider that he personally banked $42 million from Wotif's IPO.

Ruthless personal honesty. Dang, that's just a refreshing perspective.

Number 2

I call it the new car syndrome. You've just bought a new car, and suddenly you notice that everyone else is driving exactly the same model. For the last 6 months or so it seems to me that there are a lot of pregnant women out there.

You see, Mrs J is about 2 weeks away from giving birth to our second baby (or as Austin Powers would say, "number 2"). Honestly, she looks like she's going to pop any day (and she still has the pregnant glow happening...). Sitting at home on the couch, you can literally see her tummy moving all over the place. I tell you, it's one of the most amazing things.

So yeah, expect a little bit of light blogging for a while. Yes, I'll be a good blog citizen and let y'all know when we've got some news. And yes, I do know the sex, but will save that bit of news. Anticipation is half the fun.

Fully alive

There are moments in life when you just want to swallow a huge chunk of air, hold it in, smile, and hope that you'll remember the scene forever.

Yesterday I joined a dozen mates on board a two deck cruiser we'd rented to travel around Pittwater, the large harbour on the western side of Sydney's Northern Beaches peninsula. We had it all. A beautiful day, beer, meat for the BBQ, good humour, the celebration of one guy's impending marriage, and the chance to cast aside responsibilities and thoughts about work.

As we sat around at the beginning of our trip, feeling very pleased with ourselves, one guy remarked to me that there was nowhere else in the world he would rather be right now. This picture, taken on my camera phone, captured the moment for me as we dived off our anchored boat into the water.

Hello? VoIP's dial tone mystery

I was talking to ITJourno's Simon Sharwood yesterday when I got the feeling he wasn't listening to my eloquent musings any more. Turns out he wasn't being rude. The VoIP phone he uses at his office had gone dead and the line was silent. No "beep beep" to say that the line had been lost. All the more strange because our office is not on VoIP.

That's a real shortcoming, and proves that while VoIP is the great PSTN killer, it's still a long way from offering all the basic service elements. Is this a widespread problem? First time it's happened to me.

VoIP dropouts

Yesterday during the intensity of our usual Monday deadlines I was deep in conversation with a contact for one of the stories we ran in today's paper. I'd called him in Melbourne from our Sydney office over what I typically presume is a regular phone line. Without warning the line went silent, as if he'd stopped talking. Confused, I hung up, and he called back. Turns out his VoIP connection had dropped out.

So this is the new reality of IP-based telephones: No good old "beep beep beep" when you hang up on somone or the line drops out. And it was interesting that I could not tell the difference between digital and analogue phone call quality.

Crazy Johns' spectacular CRM failure

Crazy Johns salesman [calling to upsell my wife on our joint mobile phone package]: "Can I speak to [my wife] please?"

Me: "No. One of your salespeople just called me an hour ago. I gave her my wife's mobile number even though we are your customers."

Crazy Johns salesman: "Ok."

Me [agitated and on news deadline]: "Can I just say, your CRM system sucks. You have called me four times over the last two months about this. I've already sorted out my package."

Crazy Johns salesman: "I'm sorry about that. I'll make a note here not to call you again."

Me [already thinking about how to end my contract]: click