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On-line onus: A panel discussion on how on-line publishers (both professional and amateur) fared Sept. 11 included, from the left, Moderator Dave Winter, Doc Searls, Neil Chase, Bruce Koon, Jason Kottke and Rick Smolan. Photo: Courtesy Seybold Seminars.
Seybold speakers address issues
from journalism to paid content
SAN FRANCISCO -- "I was afraid it was going to be NEXPO. It wasn't nearly that bad."
The newspaper industry veteran was smiling in the lobby of Moscone Center here, happy that anyone had shown up for Seybold San Francisco, held here Sept. 24-28.
Attendance was definitely off: Organizers believe that there were about 20 percent fewer attendees this year, putting turnout at about 30,000. Most visitors on the trade show floor appeared to be what trade show veterans call "backpackers" -- people who come to the show for the day.
Still, there were enough people in the various audiences of the conference to make debate lively and thought-provoking.
Compensating content
It probably takes an on-line publisher to best ask this question: "How do you stay in business?"
Mark Anderson, a consultant who is also the editor and publisher of the on-line subscription newsletter Strategic News Service (http://www.stratnews.com/), moderated a Monday evening keynote session at Seybold San Francisco that pondered the notion that information on the Internet traditionally has been free, yet the advertising model to support free information just doesn't seem to work.
When Anderson started Strategic News Service in 1995, "the idea of charging for content was an anathema." Yet, Anderson's $495-per-year newsletter thrived from its start (perhaps the fact that he had been the founder of two software companies and was a past director of the Washington Software Association had something to do with that).
"You have to sell something that is both rare and valuable" to be a success in on-line content, Anderson said. This is now coupled with the industry's "collapse of the belief that you can run a business on banner ads."
Anderson's first speaker was Daniel Kohn, a venture capitalist in Palo Alto, Calif. Kohn, who has helped manage several telecommunication firms controlled by Craig McCaw, was also the founder and chief executive of NetMarket, one of the first Internet companies (it conducted the first secure commercial transaction on the Web).
"The unofficial subtitle of this chat," Kohn started, "is, 'Why You Shouldn't Come Down and Pitch Me for a Content Web Site or a Content-Based Anything and Expect To Get Funded For It.'"
The situation is "worse than you think, although we all realize it's pretty bad," Kohn said. The problem is that while "information wants to be free," the creators of that information "want to get paid," he said.
Further, he said, as more end users get broadband access, and get more comfortable with reading on-line, "it's only going to get worse." He illustrated this by pointing out that retailers such as K-Mart and Target allow for two percent "spoilage" of inventory -- theft -- but in on-line information, as soon as one person has gotten around any type of security or encryption scheme, "they can share it with everyone."
Kohn spoke of potential methods of paying for on-line information, including the economics of the cost of the "public good" -- things like mosquito abatement and lighthouses -- and how on-line information might be paid for by the government. But, he pointed out, "You don't want Jesse Helms to pick what music you listen to."
He suggested "micropatrons," where thousands of patrons paid an artist for his or her work, except that all the patron would receive in return is a "warm feeling."
His third idea was to form nonprofit corporations, except that "there's a real issue of how much money you could really get put into that system and how much would come back out again."
Kohn's fourth idea for compensating the creators of on-line content is to "pay for atoms associated with bits," such as pricing T-shirts and similar items in a way to fully compensate the creators of the bits. He also suggested concerts -- "you can exclude people and force them to pay" -- for musicians.
The venture capitalist wrapped up his gloomy predictions for the future of compensation for on-line content by saying that maybe it becomes "a hobby instead of a well-paid profession."
Wireless is another aspect of new media on-line content. To address it, Anderson brought in Jonathan Kim, chief executive of Crisp Wireless Inc. of New York. Kim discussed how content creators might be compensated for wireless products.
"Wireless operators make money whether the content is created by publishers or users," Kim said, noting that Short Message Service (SMS) is a "perfect example" of the situation where users create their own content. "It doesn't really matter to the operators whether it is publisher-driven or end-user driven," Kim said.
Nonetheless, Kim believes that wireless content and the desire to communicate is powerful. Kim cited a friend who is in the wholesale sneaker business in New York City and how that friend has found his sales have declined because urban kids have been buying pagers and cellular phones -- their disposable income has dropped.
"People, in theory," said Kim, "will give up money they would spend on food and clothing and housing and furniture to pay for communication."
Wrapping up the session was Denise Caruso, a technology industry gadfly who was a technology columnist for the New York Times between 1995 and 2000. Caruso, too, was glum: "It's true we're going to have to figure out who is going to pay for what in commercial content if the Internet is to survive," she said.
Caruso, who is currently the executive director of the Hybrid Vigor Institute of San Francisco, believes there will be a market for paid content on the Web, if only because of the problems with the Digital Millennium Copyright Act. The law, she says, "allows content providers to lock up their content and also allows the government to throw people in jail who attempt to break the lock either for academic or other reasons.
"There will actually be a market for content," Caruso said, "because if you don't pay for it, you will go to jail."
Caruso said there needs to be "a balancing of interests" between the private and commercial worlds, because "for our society to be free, information has to flow freely as well."
She pointed to the world of academic journals as one of the most convoluted aspects of the rise of the Internet. Scientists and researchers don't have access to extensive amounts of research because such information is published in high-priced peer-reviewed journals that are being dropped from university libraries because of their cost, and aren't on-line, because publishers fear the information will be pirated.
Caruso said that a couple of new peer-reviewed journals are being established, but instead of costing "hundreds of dollars a year," they will be distributed free, with the publishing costs borne by the authors themselves.
Caruso wrapped up her presentation with some sharp comments for traditional mass media publishers. "I've been discouraged by how little advertising money goes to support real important journalism, as opposed to sex and celebrity stuff," Caruso said. "If we can find creative ways to get good journalism to pay for itself, we should. God knows these days we need it.
"Let the people who want pictures of Britney Spears pay for them, dammit."
Sept. 11 on-line
The Wednesday morning keynote session was focused on how on-line publishers fared in covering the Sept. 11 stories out of New York City and Washington, D.C.
Moderated by Dave Winer, software programmer and writer of the DaveNet e-mail newsletter, the session veered between the world of professional publishing and the world of "blogging" -- keeping a personal journal on-line for the public to see.
One of the first questions Winer asked the panel was, "What role did amateur journalism play?"
"Amateur journalism worked really well," said Doc Searls, the senior editor of Linux Journal.
Winer observed that he first learned of the jet hitting the World Trade Center from a friend who had taken over the web cam atop the Empire State Building and had pointed it at the Trade Center. "It seems in retrospect," said Winer, "that this is the first time that amateurs were able to get the story out at the same time or before the professionals."
Bruce Koon, executive news editor of Knight Ridder Digital of San Jose, pointed out that a whole new form of journalism was created two decades ago when ABC News began its Nightline program while covering the Iranian hostage crisis. Perhaps the World Trade Center and Pentagon crashes were creating a new kind of journalism as well, Koon suggested.
Further pointing out the benefits of the Internet and its ability to get stories out, Rick Smolan -- the photographer who created the Day In The Life series of books -- told the conference that he had been sent an essay about Afghanistan and the Islam faith by a friend, Mir Tamim Ansary. Smolan passed it along to Winer, who published the essay in his e-mail newsletter and on his web site.
Within hours the article had circulated around the Internet two or three times, was published on the Salon.com web site and had piqued the interest of ABC News anchor Peter Jennings.
Koon, a longtime print reporter and editor who has worked for three Northern California papers -- the Oakland Tribune, the San Francisco Examiner and the San Jose Mercury News -- said that "reporters who were on the Web had a leg up on those who weren't" the morning of Sept. 11.
Neil Chase, managing editor of CBS MarketWatch.com of San Francisco, said his web site was tipped to the suicide mission at the World Trade Center when the brother of MarketWatch's editor, a Wall Street financier, called with the news that he had heard a plane crash into a building across the street.
Chase said the entire world of financial journalism has been changed by the Web -- in the past, news came off press releases and press conferences, but now it "bubbles up" out of chat rooms, e-mails and other new sources.
CBS MarketWatch.com had "video up instantly" on its web site, Chase said. Many found the web servers of some of the traditional providers of general news to be unresponsive on Sept. 11 and ended up depending upon CBS MarketWatch.com for coverage.
"We usually get 20,000 hits a day," Chase said. "We had 2 million hits that day." The financial web site "stripped down to the bare bones" its home page so that it would load easily and would facilitate as many users as possible. The site also abandoned banner ads temporarily.
Koon said that Sept. 11 showed how newspapers must come to understand the need for speed. "Newsrooms will change due to the need for faster news," he said.
Chase, a former editor at the Arizona Republic and former member of the Medill School of Journalism faculty at Northwestern University in Evanston, Ill., acknowledged that his company had developed a system to allow it to publish news items quickly. "We can send out a headline within seconds and back it up with a lede within a minute, and just keep adding to the story as it grows."
The dilemma that Knight Ridder Digital and its newspaper affiliates faces, Koon said, is that "we have 30 different publishing front-ends. Our task is to normalize the feeds. Is XML [eXtensible Markup Language] the first step?"
Creative salon
An "age-old question" was posed by a last-minute addition to a session on content in the cross-media world. Michael O'Donnell, president and chief executive of the on-line magazine Salon.com, asked, "Is content king?"
In the television business, O'Donnell pointed out, the most successful companies are content creators. "Two years ago," O'Donnell said, "Jerry Seinfeld made more money than the entire NBC network."
Regardless, in the web business, content creators are falling by the wayside, and "all of us are wrestling to find a business model."
O'Donnell believes that the traditional publishing business model -- advertising revenue supplemented by subscription income -- will work well on the Web. "Subscriptions that are the mainstay in publishing -- representing 25 to 50 percent of revenue -- have been frowned upon and discouraged until now," O'Donnell said.
This is why Salon.com has recently instituted a system that gives subscribers more content and/or less advertising.
And while "a lot of people want to write off advertising as a flawed business model" on the Web, said O'Donnell, "in boom times advertising actually outpaces [gross domestic product]."
O'Donnell does acknowledge that on-line providers have to get "creative comparable to print creative -- the first 10 pages of a magazine are filled with full-color, full-page ads." He said that advertisers are telling him, "Until you get us a better canvas, you aren't going to see our advertising dollars."
The Salon.com executive put the content payment issue into perspective. "Someone has to pay for the content -- either advertisers or subscribers -- and I think at this point the user base is saying, 'We don't want either. We just want text.' Someone has to pay for content -- it can't be free. This notion that we don't have to pay for content -- unfortunately, that isn't reality."
Hewing back to the topic of the session, O'Donnell pointed out that Salon.com has worked actively in taking its on-line web content and moving it into book form; last year it created three books.
"One of the problems with the book business is that these three books each took a year to get published," said O'Donnell. In the future, he envisions a world where he could repackage his content in a print-on-demand environment with a just-in-time delivery system.
O'Donnell believes that "in any type of national or international story, people come to the Web." They are, he said, "not going to wait for the six o'clock news."
News on the Web has "inspired communication between the author and the audience," he said; some Salon.com writers might get as many as 500 e-mail responses to an article (he did acknowledge that some might see that as "a hassle").
The web site chief pointed out that one of the challenges facing traditional media companies is how much information they should put onto the Internet. "It's put a lot of pressure on companies like New York Times Co. and Washington Post Co. and Time Warner to find a balance between what they put on the Web for free and what they sell in other forms."
-- dmc
"Photographs no longer have the credibility they once had, because they're so easy to change."
-- Neil Chase, CBS MarketWatch.com
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