If 2015 had a single bright, shiny object in the digital media sphere, it was virtual reality (VR). The arrival of more affordable versions of Oculus Rift and Microsoft HoloLens and the mass availability of Google Cardboard helped proliferate the VR experience and stoke the inevitable speculation that personal, immersive experiences would be both the future of computing and digital content generally. Anyone who has donned VR gear can attest to the sheer coolness of the experience. In theory, VR could allow for wondrous immersive effects in journalism-moving us from reporting events to transporting audiences there.
By Steve Smith
- March 2016 Issue
Posted Mar 08, 2016
For as long as I have been covering digital media, the paid content question has been relentless. Will consumers ever really appreciate and pay directly for the costly journalism they crave? There have been many encouraging but false starts.
For a long time, I have argued that online users have a sense memory for publishers that abuse their attention. I think we reserve a special bit of grey matter for the sites that give us trouble. On some level, we recall that site X loads slowly because ad or design bloat drags down its page loads. We record somewhere in our brains that site Y is too reliant on intrusive pop-ups and full-page interstitials. Without a whiff of proof beyond my own surfing experience, I contend that many of us curtail our use of these sites, even if it is by a couple of visits a month or a few video clips not launched. Sites do an immeasurable level of damage to themselves by stretching the bounds of visitor tolerance.
For traditional print media, the digital revolution has been a full-frontal assault on the fundamentals of their editorial and business models. Digitization has been a disaster for most of these companies. So it is noteworthy that one of the oldest magazines in the U.S.--The Atlantic--is among the handful that are truly thriving.
By Steve Smith
- March 2015 Issue
Posted Mar 10, 2015
As is our custom, we end each year of Follow the Money columns anticipating what content monetization trends will drive growth in the coming months. It doesn't seem as if there will be many surprises on this front in 2015 so much as there will be next major stages in models that have already been evolving for publishers. Overshadowing all of it is the unprecedented migration of user attention to devices. "Mobile first" is not a trend or a slogan. It is the reality of modern content.
When the story of digital media is analyzed by scholars in the coming decades, I expect they will locate the current mobile migration as a critical moment in communication history. This is when the final shreds of 20th-century mass media were shed. This is when media consumption was, at last, completely detached from predictable settings and circumstances. Personalized, on-demand, fully untethered devices radically disrupt a media and advertising ecology that, during a century, had targeted its wares at morning newspaper readers, radio-prime-time and drive-time listeners, TV-prime-time viewers, and web office/home hours, etc. Sometime in the early 21st century, historians will recount that context became a fluid, highly fragmented concept.
By Steve Smith
Posted Jul 15, 2014
There is a whiff of desperation to the web these days. You detect hints of it when you see click-bait headlines occur with more frequency higher up the online content tail. You can sniff it when increasingly weird and off-topic "recommended for you" articles occupy the sidebar to major news sites. Did that "secret to vanquishing belly fat" article/ad really have anything to do with the news piece on National Security Agency (NSA) security breaches? What algorithm sees the contextual relevance in that? If targeting technology has become as complex and sophisticated as we have all been reporting, then why is recommendation spam more the rule than the exception?
By Steve Smith
- March 2014 Issue
Posted Mar 18, 2014
As has been the custom in this column since before I went gray, we end the year and our EContent 100 issue with a peek into the revenue-generating models that will dominate the coming year. Content is faced with an acute problem: The advertising support on which it counted is veering noticeably into marketing budgets and especially their own content projects. This has been a long time coming (a decade, in fact), but only now are we seeing publishers panic enough to commit to some radically different models or take the ones that have been out there for a while more seriously. A din of good and bad ideas rather than a clear direction is what we will get in 2014.
In her annual presentation on the state of the internet, Kleiner Perkins Caufield & Byers' analyst Mary Meeker teased out a single theme that will challenge content providers for another generation. The proliferation of devices in the last 5 or 6 years has created a massive new flow of data. But this time that data is coming more from the users than from traditional content providers. The amount of data being created and shared increased nine times in just 5 years to almost 2 zettabytes (or 2 trillion gigabytes) in 2011. That will increase to 5 zettabytes by 2015. The number of photos uploaded and shared each day has gone up from about 200 million in 2010 to more than 500 million (projected) per day this year.
Nearly a century ago, the first form of "mobile" advertising accompanied the first wave of modern American mobility: the car culture. The famous Burma-Shave sequential billboards peppered roadsides nationwide until the early 1960s, spacing small portions of a clever ad message at spots along the way (usually six in all) until the final kicker offered the sponsor name. Call it one of the first integrated ad units that conformed to the medium, highway driving and sightseeing.
By Steve Smith
- May 2013 Issue
Posted May 28, 2013
Around this time of year, it is our tradition to look forward to the "follow the money" trends that will matter in the coming year. But the velocity of the move to mobile platforms this past year-and the challenge of monetizing that platform-is so pressing, I thought this was a good year for this annual trends column to "go mobile" itself.
When they are off-mic and off the record, most publishing executives are getting increasingly frank about the mobile conundrum they face. The math just doesn't look good. Oh, the hordes are here. Of that there is no doubt. It is not uncommon for top media brands to report exponential spikes in the share of traffic coming to them from mobile devices in the last year.
One of the most important implications of Facebook's high-priced acquisition of mobile social photography app Instagram is the tacit admission that the social network was really a social network. The game-over thinking around Facebook, that it was the de facto social platform for the web, is an important fallacy to debunk. As one who has never been a fan of Facebook's ever-changing face, interface, privacy policies, and ad models, I admit to enjoying some of its recent missteps. From walls to timelines to sponsored stories, the company still feels like a cool lab experiment that isn't clear and stable enough in its mission to be a platform for anything but breathless coverage in the digital press.
Within the next few years, the post-PC world of connected devices is going to have as profound an effect on the buying and selling of goods in this country as the internet has had in the last decade. The velocity with which people are embracing m-commerce and now t-commerce (tapping buy buttons on tablets) is surprising even the cheerleaders of mobile media. Publishers, watch this space. Having your content on handsets and tablets could position your company to be at that lucrative point of sale (POS) in a way never before possible, largely because now the POS can be anywhere inspiration hits.
By Steve Smith
- May 2012 Issue
Posted May 24, 2012
Digital old-timers may recall the three C's of successful online business models circa 2001. Content, Community, and Commerce appeared on just about any business plan that circulated in VC Land at the time. Understanding that the web was at least three channels at once (publishing, merchandising, and person-to-person communication) was considered essential to establishing unique business models. The problem at the time for most media sites was that all three C's were a bit broken. It has taken a decade, but the rise of online search along with Facebook and Twitter have helped content companies attack two of the three C's. And in the last year, we have seen a full program to get the Commerce piece up-to-speed as challenged media models look to ecommerce revenue streams. Skittishness about maintaining separation of editorial and commercial church and state is dissolving about as fast as company margins are.
Every year at this time we take a look downstream- revenue stream, that is. Nearly a decade ago when I started writing these annual forecasts of money-making propositions that looked to be promising in the months ahead, most publishers were looking to wring what they could from the desktop experience. But the story of 2011-2012 is content's migration to a host of new platforms and devices, each of which holds the promise (the promise, mind you) of altering the free-content models that bedeviled the web. Whether on or off the traditional web browser, many of the revenue-generating ideas are being influenced by a new age of apps.
Whether the future belongs to downloadable apps or web-based HTML5 sites, the fact of the matter is that the app sensibility born of widgets and the smartphone is going to inform the way in which digital content is built and distributed from now on. App design is already migrating from Apple and Android stores to the web. Just look at Google's Chrome Web Store and Apple's Mac App Store, where content providers such as USA TODAY and Slate essentially port their iPad versions back to the desktop. Just wait for the next wave of major website relaunches: You'll see how publishers are learning from the less cluttered and more immersive examples being set by the app experience.
My inbox runneth over with can't-miss bargain offers. I am not sure how many Groupon and LivingSocial daily deal lists I actually subscribed to, but each morning my inbox is stuffed with 50%-off offers for everything from massages to theater tickets in several nearby locales. Clearly, one of the most lucrative innovations in emarketing in recent years has been the group buying and daily deal model. When LivingSocial sold a $20 voucher from Amazon.com (one of its primary investors) for $10, 1.4 million people took the bait ... including me.
By Steve Smith
- May 2011 Issue
Posted May 23, 2011
After a year of hand-wringing about how digital users must "learn to start paying for their content," we appear to be moving to a healthier and more mature place where publishers are starting to internalize, rather than externalize, the media revenue problem. At a recent conference that I organized for digital media strategies, publishers who are successfully selling content directly to businesses and consumers challenged their peers with a straightforward proposition.
As confidence builds in the economy generally (we hope) and a relentless move toward a digital media economy charges forward, here's where publishers should be looking for new opportunity in the coming year.
The predictable lament of digital publishing, "What will make them pay?" has gotten a fair airing all year on countless conference panels and in the business press. I keep hearing those dreaded terms "retraining consumers" and "reset the relationship with consumers." Well, all of that remains to be seen. I would recommend that publishers look closer to home when exploring paid models that work.
One of the curious things about romantic breakups is the way that former lovers suddenly turn on one another and seem blind to their former partner's good qualities. Something like that is happening in this much-hyped move off of the digital desktop and onto "consumer devices."
As we move into the second half of the year, we hear that many of the major news brands-such as The New York Times and, perhaps, even ABC News-are thinking of imposing new metered or pay wall ideas. This tiered approach appears to have made traction because many feel that making only the most frequent visitors pay for persistent access helps to identify the real brand loyalists whose recidivist behavior demonstrates the value they already place on your brand. But will it work for much more commodified content like most newspapers?
By Steve Smith
- June 2010 Issue
Posted Jun 04, 2010
Selling goods and leveraging community will both be important to content providers moving forward, of course. But one long overdue goal of digital media, to "get beyond the banner," is going to be critical if traditional media want to retrieve the kinds of revenue many of them are losing in their offline properties. Ultimately, digital media really starts paying off for publishers when they get advertisers to spend more of their budgets online.
By Steve Smith
- April 2010 Issue
Posted Apr 15, 2010
The 2009 shopping season will give the electronic publishing world its first indication of how consumers, schools, and businesses regard the wave of e-reader devices about to assault them.
That pressure that you digital media managers are feeling in your right shoulder about now ... that is your publisher leaning hard on you to recover the revenue the company just lost everywhere else.
Lest we forget, it was just a couple of years ago that "free and ad-supported" was the refrain that drove the second digital go-go era after 2004. Apart from the recession, the big difference now is that the offline TV and print businesses that helped underwrite big media's digital pursuits are now under siege. The content-creation engines that built these brands seem to be threatened, and the digital platform is not really mature enough to support media-making as we have known it.
As we move into fall, the year-long revival of the paid content argument shows no sign of easing.
If memory serves, the digital revolution was offered up to us as a great new driver of efficiency. Even at the most basic level of owning a PC, we were told that these new machines would organize our records and even clarify our ways of thinking. Really? Has anyone looked behind my desk lately?
As I write this at the end of 1Q 2009, things look especially grim for business information on almost any platform. In print, across 200 B2B titles that ad auditing group IMS tracks, ad pages were down in January and February 28.3% from the same 2-month span in 2008.
I am now living through the third wave of arguments for fee-based digital content models in the decade and a half I have covered the internet publishing world. The inevitable response to the dual forces of recessionary ad decline and the more tectonic and irreversible shift to digital has been: "Make 'em pay." Almost everyone on the consumer side of the fence is talking about "hybrid" models and "pay areas." It is hard to listen to such a conversation without someone dropping "the iTunes precedent" as an argument that both micropayment mechanisms and consumer attitudes have turned the corner on this issue. People are ready to underwrite the costly content industry. They see the ugly alternative (bad or shallow content), and they are more willing to put a cash value on digital media now.
By Steve Smith
- June 2009 Issue
Posted Jun 03, 2009
No, this is not another column instructing publishers to extend their brands to mobile. I think that case has been made already to almost all parties on the consumer side and to an increasing number of business information providers. At this early stage, everyone's degree of commitment varies, of course, because no one really knows what sort of revenue streams will evolve. Some publishers just repurpose their RSS feeds for mobile access; others have third-party providers cherry-pick website content to reshape it for the small screen. It feels like 1997 all over again.
By Steve Smith
- May 2009 Issue
Posted May 07, 2009
There is no getting around it. This column's moniker begs for a snarky retort in these dark times, so I may as well beat you to the punch line. By the time you read this, I expect that more than a few startups that made a big splash last year will be running out of cash, fading away, and/or selling out cheap.
By Steve Smith
- April 2009 Issue
Posted Mar 30, 2009
As the eyes of old print, radio, and TV media turn to the internet for a bridge to take them across the current media business abyss, one troubling fact is becoming abundantly clear: The "real money" isn't there yet. Top executives at TV networks, magazine companies, and even newspapers have known for a while that on-air minutes and print pages sell at much higher rates and produce more revenue in most cases than even the most ambitious digital models.
By Steve Smith
- March 2009 Issue
Posted Mar 05, 2009
My column's moniker has a cruel irony to it this month as companies peer into the abyss of a business decline with no apparent bottom. Follow the Money only begs two questions nowadays: What money? Where do we follow it to? Like a fog-locked airport with a damaged radar dish, the emedia fleet feels grounded as we edge toward a wholly uncertain 2009.
Time once again to crawl out on that slippery limb encrusted with winter ice: the predictions branch. Above and beyond the expected recession woes, digital content is dangling over some sharp challenges in 2009, or at least it looks that way from my chilly perch. Look out below for falling commentators.
The digital privacy battles now brewing in the House of Representatives and at the Federal Trade Commission finally woke the industry up to its complacency over this issue, but I think many publishers and ad networks proceeded to get up on the wrong side of the bed. The principals in the behavioral targeting industry, which is attracting much of the scrutiny now, seem to recognize that they must better explain their policies to consumers and assure all of us that they indeed are not collecting personally identifiable information (PII) when they track our movements around the internet. Ultimately, though, I think they woke up to the wrong issue.
Sometimes we get ahead of ourselves in the digital dreams business. We fantasize so extravagantly about the future shape of a technology that we miss some of its more relevant and mundane uses here and now. Take virtual worlds. Environments such as Second Life promised online immersion where realistic avatars moved through 3D space and ultimately enhanced everything from the media viewing experience to shopping.
Another day, another vertical. Earlier this year the press release mill worked overtime announcing that every imaginable media brand and ad entrepreneur was launching some sort of vertical network—either of content, ads, or (usually) both.
By Steve Smith
- Sept 2008 Issue
Posted Aug 27, 2008
Is anyone making money on web video?" The publisher of one of the most popular and long-running video shows online recently posed that question to one of his peers and me. The other publisher, who is responsible for hundreds of hours of video content on her suite of branded media sites, just shook her head. "And anyone who tells you he is making money on video is lying," she contended.
Cool gadgets alone do not change engrained media consumption habits. It took nearly 2 decades for PCs, broadband, and ease of use finally to converge to the point that Googling for the answer to anything became a reflex. Media change is a long, complex, and very unpredictable interplay of cultural, technological, and economic forces slowly transforming conventions over time. No single device is responsible for such shifts. They represent the accumulated energy of many confluent forces.
By Steve Smith
- June 2008 Issue
Posted Jun 03, 2008
For the 15 years I have been writing about digital media, two media business models have been "about to break through any day now"
By Steve Smith
- May 2008 Issue
Posted Apr 22, 2008
The Federal Trade Commission (FTC) gave the digital content industry a dubious present last Christmas. At the same time the FTC approved a merger of Google with ad network and services provider DoubleClick, it also lobbed the issue of privacy back over the net for the companies to solve. At issue for the first time in a very public way is a topic I have been writing about in these columns since 2002: behavioral targeting (aka BT).
By Steve Smith
- April 2008 Issue
Posted Apr 01, 2008
I admit that I have been a longtime skeptical observer of the digital magazine format, although 6 or 7 years after its introduction the platform is getting some traction with readers and publishers. Generally designed as facsimiles of printed periodicals, the digi-mag always seemed to fill an unnecessary niche between old and new media, between physical magazines and websites. It has the interactivity and rich media potential of a digital product (hot links, embedded multimedia), but it retained the lush design sense of print. But was this a solution in search of a problem?
By Steve Smith
- March 2008 Issue
Posted Feb 19, 2008
As most traditional publishers are painfully aware, digitization has a tendency to commodify everything in its reach. Just think how much of the content we paid for a decade ago—from newspapers to premium video and audio content—is available now at no cost online. From news to business information, phone calls to software applications, the new model is giving away the store in the hopes of making a profit in some other way. Most text and video content relies on advertising to pay its way now, while service-based products, like web applications and digital calling, put some limitations on the free offering in order to upsell a richer version.
Keeping with years of tradition, I always like to mark the EContent 100 issue with brash predictions about where publishers will start seeing some money or investment in the coming days. For 2007 my prognostications focused on the rising importance of content merchandising, the ad-supported mobile media model, increased emphasis on ad-targeting, and the possible (possible, mind you) revival of micro-payments. Boy, am I glad I hedged my bets.
Community is an organic phenomenon. You don't make it. You don't build it. At best, you cultivate it, and many publishers are finding it hard to break ground.
Vendors are coming out of the woodwork with all of these hosted and plug-in solutions that promise to build community on a site. Bosh. Community is not a commodity that can be manufactured, and it is not a technical issue in need of a solution.
The problem of video search has been waiting in the wings for a number of years now. True believers like Blinkx and Truveo (now part of AOL) were patiently experimenting with ways of indexing and tagging video assets long before the broadband penetration rates and usage curves supported it. During the last year, at YouTube, the dam has broken. People are starting to look for video in the same way they hunt for text.
Years ago, the CEO of a then-young video search firm insisted that some day soon everyone would need a query box to navigate the video records of their own lives. Video camera technology was becoming so cheap and light that many people would take to recording every moment and then dump it onto those equally cheap multi-terabyte hard drives at home. Facial recognition algorithms and speech-to-text operations would help you index everyday video so that you could query footage of grandma at your kid’s fourth birthday just as effectively as Googling a keyword to find articles.