Sour Alba

As one who believes in high-quality niche content, I’ve long been a fan of of the video game comic/commentary/community Penny Arcade. (In fact, I keep trying to slip John Gabriel’s Greater Internet Fuckwad Theory into presentations to clients curious about user interaction.)

I was therefore heartened and impressed by this post from the aforementioned Gabe about their attitude to advertising on the Penny Arcade (apologies for the lengthy quote, it’s worth it):

Other game site out there takes ads for whatever game they can get. It doesn’t matter if it’s a pile of crap, if the publisher pays for the spot IGN or Gamespot or whoever will run the ad. That’s fine but that’s not how we do it and the news posts you just read are part of the reason why..

No matter how early the build we tell the publishers that unless we can see it played in front of us or play it ourselves we won’t run ads for it. Obviously a lot can still go wrong during development but we make the best decisions we can. We do not think of the ads you see on our page as ads. They are recommendations and we try extremely hard to insure that anything we put over there is worth your time.

When Prince of Persia 2 came out and we saw that it was crap we said as much on the site. Ads for the game appeared right next to those news posts slamming it. Needless to say Ubi wasn’t very happy and Robert got some angry phone calls but our loyalty is to our readers not the people paying the bills.

We explained to Ubi that the reason our ads perform better than any other site out there is because our readers trust us and that means we have to admit when something we advertise doesn’t turn out as good as we hoped.

How great is that? How sensible is that? They regard ads as part of the content of their site and they vet products before they carry ads for them. If they then carry negative reviews, the games companies just have to suck it up. And why do these powerful organisations suck it up? They suck it up because ads on Penny Arcade out-perform ads on other sites. And why does that happen? Because Penny Arcade’s users trust what they see on the site. And they trust the ads precisely because the products are vetted and honestly reviewed.

Penny Arcade’s been around a long time and is a huge success. They really know what they’re doing. In that one post, Gabe and Tycho demonstrate far more commercial nous than many advertising people I’ve encountered.

Imagine similar conversations at a newspaper: “You want a full-colour wraparound advertising your ‘crack cocaine for kids’ casino open day? You want it to look like it’s the real front page of our paper? You want to spend £200? No way, we’re a respectable family publication. Oh, you said £2,000. Hey, sure, no problem. We’ll throw in the editor’s mum posing nude with a donkey as well.”

Let’s focus on Gabe’s key phrase: “Our loyalty is to our readers not the people paying the bills.” Maybe if newspapers had the spine to adopt that attitude their sales wouldn’t be going down the toilet.

Amazon has unveiled its “wireless reading device”, the Kindle (right). At 7.5in by 5.3in it’s designed to combine portability with a large enough screen to allow comfortable reading of a lot of text. Bezos & Co hope that people will read books on this device in the way they don’t on computers, which are not known for their “in the pocket” handiness.

When I’m on the move I read content through my Nokia E61 (left), which has a 320 x 240 pixel screen. It is certainly easier to read text on it than on a standard mobile phone but given the choice I’d still rather read paper. And this is what I think users will find with the Kindle. Yes, it’s more portable than a computer. Yes, it’s more readable than a phone or PDA. But it’s still not as convenient or pleasant to read as a book.

However, Amazon are incentivising their product with some clever pricing. They’re selling Kindle versions of books cheaper than the printed products (Run by Ann Patchett is $6 cheaper). This is where the advantage of the Kindle lies. Without printing and distribution costs, ebooks can costs a lot less. The success of Amazon’s reader will depend on whether the diminished ease-of-reading offer by a screen versus a book is offset by the lower price.

All this gets interesting for journalists because, as well as 80,000+ books, the Amazon Kindle offers access to the following:

• Top U.S. newspapers including The New York Times, Wall Street Journal, and Washington Post; top magazines including TIME, Atlantic Monthly, and Forbes—all auto-delivered wirelessly.
• Top international newspapers from France, Germany, and Ireland; Le Monde, Frankfurter Allgemeine, and The Irish Times.
• More than 250 top blogs from the worlds of business, technology, sports, entertainment, and politics, including BoingBoing, Slashdot, TechCrunch, ESPN’s Bill Simmons, The Onion, Michelle Malkin, and The Huffington Post.

It is worth noting that all of these are paid for services - unlike the web versions of these publications.

This aspect of the Kindle is particularly interesting because many in journalism have predicted the coming of a convergence device that combined readability with portability and provide better revenue models than the web. One such expert is new media sage Vin Crosbie (now Adjunct Professor of Visual and Interactive Communications at Syracuse University) who was quoted thus in the Online Journalism Review in 2002:

Vin Crosbie … goes so far as to predict that Web publishing will be subsumed and overwhelmed by a third wave of electronic publishing. (The first wave of proprietary online services, brought to you by Prodigy, Compuserve and America Online in the 1980s and early ’90s, was followed by the Web’s second wave.)

And what will make up this killer third wave? “Pervasive portable media,” says Crosbie, a media consultant in Greenwich, Conn. “The Web will become the lesser online medium for commercial publications beginning in the second half of this decade.”

Next-generation portable devices — which are just now hitting store shelves — will have several built-in advantages over the Web as a publishing medium, he says. Chief among them:

* They’re push media. Third-wave online newspaper editions will be delivered to devices wirelessly and automatically each day (up to several times a day) instead of relying on the user to fetch the news one page at a time. Even the most successful online newspaper, The New York Times on the Web, sees the average user stop by only 3.6 days a month, according to the Times’ latest stats.

* Prospects for advertising are more favorable. On the Web, publishers face a bottomless advertising hole with ads that are noisy, distracting and ignored. On a mobile device, newspaper editions can be formatted in a graphical layout that locks in a limited amount of display ad space, commanding premium rates.

* For the most part, the Web requires us to be tethered to a PC or laptop. Not so online publishing for mobile devices. We’re a mobile society, and we’d like to take our digital news with us.

The coming mobile revolution will require newsrooms to undergo a sea change in strategic thinking.

“Eight years ago, when you talked about online publishing, the mission for online news publishers was to use any combination of software and online technologies to promulgate the newspaper’s mission,” Crosbie says in a phone interview. “Since then, those efforts have calcified so that online publishing now means Web publishing. Newspapers have got to stop the tunnel vision and go back to original concept: Online publishing is the Web plus many other things.”

Of course, things have moved on in the five years since that article was written. RSS feeds have made the point about push vs pull redundant. The rise of mobile phones with half decent screens and the arrival of handheld gaming devices with internet access both mean that accessing the web no longer requires anyone to be tethered to anything.

However, the point about advertising display and layout of content remains valid half a decade on. This is important because the big problem for newspapers is plugging the gap between falling offline revenues and much smaller - though growing - online revenues. Perhaps the Kindle is another faltering step towards a device that will square that particular circle.

That said, the model for newspapers on the Kindle is not the answer. I can get the New York Times free through my Nokia’s web browser. Why would I pay to read it on a slightly bigger screen?

Henry Blodget at the Internet Outsider has done some sums on the future of newspaper revenues and costs. Needless to say he paints a less than rosy picture. But, for a journalist, the most worrying aspect is this nugget:

Do you know why [newspapers are] screwed? It’s actually not the cost of paper, ink, trucks, printing plants, and other physical distribution expenses. Rather, it’s the cost of content creation.

Memo to hacks everywhere: when he says “cost of content creation”, he means “your salary”.

His calculations are solid and his assumptions valid. With very very few exceptions, online ad revenues generated by pieces of online content do not cover the cost of creating that content. That means when offline revenues fall (and fall they will), you’re - to use Blodget’s pithy phrase - “screwed”.

So what to do?

Hope current online ad revenues for news organistions increase enough to match offline ones? If you’re hoping like that, hope me a solid gold, eco-friendly Lamborghini Countach, the results will be the same.

Charge for content? In my experience this guarantees such a small audience that articles generate less revenue than if they were free and attracting ad revenue. Don’t just take my word for it. Ask the Noo Yoik Times.

Get a job stacking shelves and be a journalist part-time? To hear some people tell it, this is the future of journalism - amateur enthusiasts sleuthing through local issues, posting stories for prestige. There is a problem with this and not many people will thank me for pointing this out: the ability to collect information, sort it in a coherent way, present it an intelligent fashion that is entertaining, grammatical and spelled correctly is restricted to a very small segment of the population - and not enough journalists.

Amid all the (justified) excitement about blogging it is worth remembering that the vast majority of news-related blogs link to stories by professional journalists. So, after the economic meltdown of mass media, who will write the original stories for others to link to? Quis blogodiet ipsos blogodes?

The reader demand is clearly for quality journalism. Who will produce this if there are no longer professional reporters? The role of bloggers, citizen journalists and user-generated content is assured. But the current online economic models have no place for full-time experts who want to make a living out of content creation.