Why Media Apps Aren’t as Good a Business as They Seem

Source: Jeff Bercovici
Story by: http://blogs.forbes.com/jeffbercovici/

It’s long been an article of faith among media optimists that the shift to digital publishing would be a good thing for publishers in the long run, freeing them of the burden of their biggest costs: paper, printing and postage.

That’s why I was surprised to hear David Link, founder and creative director of the digital design firm The Wonderfactory, say, at a recent conference, that producing and distributing app-based magazines for tablet computers and other mobile devices is as costly as putting them out with ink and paper, if not more so. The problem, he told me afterward, is bandwidth. Magazine apps are large downloads. One of the biggest, the early version of Wired’s iPad edition, was around half a gigabyte.

If you’re selling directly through Apple’s iTunes store, that’s no problem: Apple handles the download — in exchange for a 30 percent cut of the sale price. But most publishers aren’t satisfied with that arrangement, which leaves Apple in control of the customer relationship and the resulting data and, for now, limits them to selling single copies rather than subscriptions. However, says Link, “if they’re going through the subscription route and they want to circumvent that” — for instance, through Zinio, a digital publishing services provider with an app of its own — “then they actually have to pay for all that bandwidth.”

Over time, of course, bandwidth gets cheaper, and file compression gets better. Link says most magazine apps now fall in the range of 80 to 250 megabytes per issue, and “I’m hoping they’ll get down to 30 to 50 megs.” But set against that is the pressure to inflate them with ever more rich media. Just as publishers once conditioned readers to expect that all print content ought to be free online, now they’re teaching consumers to expect magazine apps that are tricked out with videos, interactive graphics and more. Link points out that Sports Illustrated’s iPad app, which Wonderfactory developed, features 50 to 100 photos per issue not found in the magazine. And all that extra content doesn’t produce itself, either: Link estimates that putting out an enhanced mobile edition requires two to five extra staffers.

None of this is to say media apps won’t be a great business at some point. But if and when they get there, it will be because of of the high rates publishers will be able to charge for rich, interactive, targeted advertising. Take that out of the equation and app-based publishing, like print publishing, is a cost-heavy, money-losing proposition.

An edit too far

Arbitrator orders reinstatement of RFA reporter whose edited story caused a diplomatic flap

By Andy Zipser, Editor

Source: The Guild Reporter

In a case underscoring the dangers of social media reporting — especially when complicated by foreign-language translation —  a Guild-represented reporter for Radio Free Asia has won an arbitration that rescinds his termination and orders full reinstatement with back pay, seniority and benefits. 

A highly regarded 10-year veteran who had racked up several awards for his reporting, King Man Ho nevertheless was fired last February after video-recording, tweeting and writing about an event at which Secretary of State Hillary Clinton briefly interacted with two Chinese bloggers. Although Ho’s story correctly quoted one of the bloggers, subsequent editing made the blogger sound overly enthusiastic about Clinton and implied “too intimate a connection with the U.S. State Department.”

Moreover, an RFA headline referred to the bloggers as “Chinese Web dissidents,” a characterization which the bloggers vigorously disputed. “The Son of Free Asia reporter has a bit professional ethic; he hocus pocus my work, make me outrageous,” one tweeted in angry response.

In the wake of the ensuing diplomatic flap, and amid concerns that the reports would endanger the bloggers upon their return to China, the RFA coerced Ho into tweeting an apology. Written by Ho’s manager, Shiny Li, the statement said he had misquoted the blogger and had mischaracterized the meeting with Clinton — which, ironically, followed a speech she gave at the Newseum about internet freedom.  But despite assenting to the forced apology, Ho was warned that an RFA investigation into the incident would continue.

Later that month, following a meeting with management at which Ho was faulted for showing insufficient remorse, the reporter was fired for “insubordination and violation of the Code of Journalistic Ethics and RFA’s Conflict of Interest policy.”  The Guild promptly responded with a grievance, charging RFA with making Ho “the public scapegoat for a legitimate news story” and forcing him to publicly apologize “for a story that was wholly accurate.”

After three days of hearings in July and August, arbitrator Herbert Fishgold agreed. Not only had the RFA failed to make its case for insubordination and ethics violations, he wrote, but it had “contributed [to] and exacerbated” a diplomatically sensitive situation. “As noted,” he wrote, the two bloggers “took specific issue with the use of ‘warm push’ and ‘Dissidents,’ and the inference that they ‘met’ with Secretary Clinton. All of these concerns are attributable to Li’s editing and the headline, not to Ho’s actual wording. . . . Li’s editing allowed an impolitic suggestion that these ‘independent’ bloggers were cozy with the Secretary.”

Although Fishgold rebuked Ho for some of his tweets, which had become increasingly intemperate as he responded to the blogger’s accusations of unprofessional conduct, he noted Ho’s “otherwise unblemished record during the past ten years.” Accordingly, he wrote Nov. 9, Ho should receive a written warning “that he should not engage in a public ‘debate’ with news sources” but otherwise should be reinstated with back pay — an amount the Washington-Baltimore Guild estimates at approximately $50,000.

Why Newsquest journalists are rebelling after Gannett executive’s profits boast

By Roy Greenslade  Source: guardian.co.uk

Brighton Argus journalists were on the picket line today after voting to stage a two-day strike in protest at a two-year freeze on wages and the removal of subbing jobs.

Their major slogan was “Keep jobs local”, a reference to the fact that the paper is to be subbed largely from Southampton in future.

I somehow doubt that the National Union of Journalists would have voted for this action in normal circumstances. Their employer, Newsquest/Gannett, has got away with plenty of cutbacks in the past by claiming that plunging profits have necessitated editorial budget reductions.

But Gannett’s chief financial officer, Gracia Martore, put a lie to those claims last month when she told US analysts that Newsquest was making profits. Healthy profits.

Lest anyone forgets, here’s a verbatim account of what she said on 15 October:

“Let me once and for all dispel the myth that Newsquest doesn’t make money. Newsquest makes a lot of money.

In fact, their margin, as I have said a couple of times, is consistent with the margin that our local US community publishing operations generate.

So their margins are in the high teens to low 20s. And they have consistently made money throughout the years, even in a year like last year when revenues were under as much pressure as they were.”

No wonder Newsquest’s journalists in Brighton, Blackburn, Darlington and Southampton have taken, or are planning to take, industrial action.

As I’ve said before, I think subbing “hubs” are understandable. But the move to create them must be carried out sympathetically. Subs shouldn’t be cast out but encouraged to become content-providers.

As for the pay freeze, that’s altogether unacceptable in the light of Martore’s admission. It is even worse than that because Newsquest/Gannett bosses have been receiving rises while their hard-pressed employees have not.

I understand there is some embarrassment at Newsquest about Martore’s statement and hints that she overstated the true situation.

But Newsquest/Gannett cannot have it both ways. Either she told the truth to analysts, meaning that Newsquest’s executives have been telling porkies to their newspaper staffs.

Or she was “economical with the truth” when addressing sceptical US analysts.

Either Newsquest is making bumper profits and should not have imposed a pay freeze. Or it is scraping by, in which case the company’s chief financial officer should come clean.

New owners of Canwest papers targeting business offices after slashing editorial, advertising jobs

Source: cwa-scacanada.ca

Postmedia Network, having just slashed scores of jobs in editorial and advertising departments across the former Canwest chain, is now turning its sights on the newspapers’ business offices.

The new company’s owners plan to begin centralizing the finance departments’ functions in Toronto and Winnipeg by the end of January. Staff reductions will be accomplished through buyouts and layoffs.

While Postmedia says it does not envision departmental closures, it is unknown how many business office jobs will be lost across the chain, which includes the flagship National Post, Calgary Herald, Edmonton Journal, Ottawa Citizen, Montreal Gazette, Vancouver Sun and Province, and the Victoria Times-Colonist.

Cuts in a newspaper’s business office will undoubtedly reduce local service and mean fewer connections between the paper and the people it serves in the community.

 “While any staff cuts are lamentable, we are particularly concerned about the editorial jobs that have been eliminated,” says Arnold Amber, Director of CWA Canada, which has members at five of the former Canwest papers. “Cutting reporters, photographers and editors certainly does not improve the quality of a newspaper.”

Although Postmedia is justifying the cuts by saying it wants to focus on a move to digital media, getting rid of experienced journalists is a recipe for mediocrity, says Amber.

“Loyal readers of these newspapers, advertisers and business customers expect high-quality local service and news coverage. If all of that is diminished, it does not bode well for the future of that community’s newspaper,” he notes.

The cuts have been swift and deep since Postmedia’s new fiscal year began on Sept. 1. CEO Paul Godfrey, while acknowledging that nearly all of the 11 Canwest dailies are profitable, is looking to recover $40 million to help pay down debt incurred when Postmedia bought the chain from Canwest.

CWA Canada has determined that Postmedia has shed at least 228 employees, including managers, across the chain. While it is difficult to obtain precise figures, the union estimates there have been about 100 cuts in advertising and at least 70 in editorial. Overall, CWA Canada has lost about 50 members as a result of the cuts.

Last year, Canwest chopped almost 800 jobs or 13 per cent of its workforce, while struggling under creditor protection, leaving Postmedia to inherit about 5,000 employees.

The most recent cuts were achieved by either buyouts or layoffs, with the former dominating at unionized newspapers and the latter at non-union papers.

One source told CWA Canada that all the cuts at the non-unionized Calgary Herald were layoffs. “Nobody was offered a buyout in the Herald newsroom; they were just laid off. Management announced that 35 jobs would be chopped, including eight in the newsroom.” The source adds: “The deskers (copy editors) feel like the sword of Damocles is hanging over them because management classifies them as ‘non-content providers’ and considers them expendable.”

This suggests that Postmedia is prepared to have its reporters and correspondents publish directly to the Web, without an experienced copy editor in between, ensuring an article’s accuracy, balance and, in many cases, legally acceptable reportage.

The Cuts
Calgary Herald

Jobs cut: 35 layoffs / 8 editorial positionsEdmonton Journal

Jobs cut: 20 (2 layoffs) / 8 editorial positions

Montreal Gazette

Jobs cut: 27 (23 union) / 10 editorial positions (includes 2 retirements)

Ottawa Citizen

Jobs cut: 42 (17 union) / 10 editorial positions

Regina Leader-Post

Jobs cut: 18 (3 layoffs) / 3 editorial positions

Saskatoon StarPhoenix

Jobs cut: 9 (unconfirmed)Vancouver Sun The Province

Jobs cut: 50 (48 union) / 20 editorial positions

Victoria Times-Colonist

Jobs cut: 12 (9 Guild members and 3 CEP)

2 editorial positions

Windsor Star

Jobs cut: 8 / 7 editorial positions

Newspapers must find ways to sell content

John Shmuel, Financial Post · Thursday, Nov. 11, 2010

Source: financialpost.com

Newspapers will certainly survive well into the future, but that survival is going to rely on finding increasingly new and innovative ways to monetize their content — and not just putting up pay walls.

Finding a happy middle was the message that came through most strongly during the Media in Transformation conference held in Toronto Thursday which was hosted by the Audit Bureau of Circulation.

Paul Godfrey, chief executive of Postmedia Network Inc., which owns the National Post, and one of the event’s speakers, said right now all eyes are on newspapers such as The New York Times, which will put up its pay wall in January.

“You know, I think everyone is exploring pay walls. Everybody seems to be waiting to see what happens,” he said in an interview after his speech. “The fact is that that’s going to be one of the big questions.”

Keeping readers, and drawing in new ones after a pay wall goes up meanwhile elicited different opinions from a panel that sat down to debate whether readers should be paying for content at all.

One of the panelists, Andrew Madden, who is Google’s head of strategic partnerships, said newspapers risk bleeding off readership if they erect pay walls that make them invisible to search engines.

“You need to think strategically on how to use search engines and pay walls,” he said.

Mr. Godfrey stressed that innovation was an important facet in monetizing the content of newspapers.

He cited an example where a newspaper might have a restaurant review section, and allow other users to comment or submit their own reviews. In order to monetize the content, the newspaper could charge restaurant owners to post their own submissions about their business, or even post their menus.

“Restaurateurs don’t traditionally advertise in newspapers, it’s just too expensive for them,” he said. “But something like that gives them an opportunity to be able to use our platform.”

Mr. Godfrey also said it was crucial that the newspaper industry direct capital spending toward improving digital con-tent, rather than spending it on traditional technologies.

“We can’t be spending it on printing presses because, A, they’re very costly, and you can get a printing press that’s 20 years old and it’s still in great working condition,” he said. “But now printing presses have colour on every page for example, so you’re behind the times five years after you spend millions and millions of dollars.”

And whereas improving the traditional newspaper medium will likely only serve to impress current readers, Mr. Godfrey said increasing capital spending on digital content and delivery will help build an audience, since digital content can engage audiences in ways newspapers can’t.

Of course, funding digital content won’t matter unless people are willing to pay for it. The good news, however, is that most of the event’s speakers believed that readers are willing to pay for quality content.

“If you have exclusive content, niche content — people are drawn to that,” said Lynne Brennan, senior vice-president of circulation for Dow Jones & Company. “If you provide readers with something they want, they’re going to pay for it.”

jshmuel@nationalpost.com

Unionization in Canada rises to 4.2 million workers

Women experienced disproportionately more gains in unionized jobs.

by NUPGE

Ottawa, November 8, 2010 — Statistics Canada reports that just over 4.2 million employees belonged to a union in Canada during the first half of 2010, up 64,000 from the same period last year.

Union membership rose at a slightly faster pace than total employment. As a result, the nation’s unionization rate edged up from 29.5 percent in 2009 to 29.6 percent in 2010.

The largest gain in rates occurred in British Columbia while the rate was highest in Newfoundland and Labrador (37.9 percent).

The average number of paid employees during the first half of 2010 reached 14.3 million, up by 171,000 over the same period last year.The gap in unionization rates between men and women widened slightly in 2010. Women experienced disproportionately more gains in unionized jobs. Consequently, their unionization rate inched up to 30.9 percent, while the rate for men remained constant at 28.2 percent.Just over 2.2 million women belonged to a union in 2010, compared with just under 2.0 million men.The unionization rate for permanent employees increased to 30.0 percent between 2009 and 2010 while it decreased to 27.3 percent for those in non-permanent jobs. The rate rose in larger firms (100 employees or more), declined among those with 20 to 99 employees and remained constant for firms with fewer than 20 employees.The provincial picture was mixed. Unionization rates fell in four provinces: Nova Scotia, Quebec, Saskatchewan and Alberta. The largest gain in rates occurred in British Columbia while the rate was highest in Newfoundland and Labrador (37.9 percent).Among industries, rates were highest in public administration (68.5 percent) and education (67.0 percent). Notable declines occurred in agriculture, health care and social assistance and education. Notable increases occurred in transportation and warehousing and public administration.An average of 288,000 employees were not union members but were covered by a collective agreement in the first half of 2010, down from last year’s total of 300,000.In 2009, there were 157 strikes or lockouts that involved a loss in working time of at least 10 person-days. This was the second lowest number on record. At the same time, 67,000 workers were involved in these strikes or lockouts and just under 2.2 million person-days in working time were lost — the highest number of days lost since 2005.

The National Union of Public and General Employees (NUPGE) is one of Canada’s largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good.Website: http://www.nupge.ca/