virtualeconomics

Harvesting soft power, squandering soft power

Since Joseph Nye coined the phrase more than twenty years ago the US has gone to great lengths to defend and expand the ambit of its soft power - the message of Hollywood, the American music industry and the whole apparatus of monocultural hegemony that every day is whispered into nearly seven billion ears "America is best. America is right. Everyone would be American if they could".

It isn't, after all, merely the persuasive talents of the music and film industry lobbyists that lead the American congress, senate, president and judiciary to work so tirelessly in the interest of those industries. It's the perfectly sincere self-interest of a great power at work. So when copyright law is endlessly revised at both the statutory and case level to better serve the demands of the MPAA and RIAA; when the diplomatic efforts of the state are turned to expanding that American copyright law to the corners of the earth; when "Homeland Security" means not the fight against post-9/11 terrorism but the seizure of alleged copyright infringing domains; when the rights of American people and technology innovators alike are routinely trampled so that funding continues uninterrupted for the American message; that's America defending its soft power. That's diplomacy, statecraft; what Rochau and Bismarck called realpolitik. 

The odd thing, then, is not that the US will go to such lengths to safeguard its soft power. The odd thing is that the UK baulks at spending less than £250m to safeguard its own.

Hyperlocal is growing by shrinking

Hyperlocal is shrinking. Not the market, or the number of sites, or even the number of start-ups in the space - just a glance at the OpenlyLocal directory reveals that the sites are multiplying as quickly as ever. But the size of the communities that new local businesses and sites aim to serve are getting smaller all the time, with the latest websites and businesses launching in this space often aiming to cover communities of fewer than a dozen streets or a single postcode.

And that's potentially very interesting news for local journalists facing yet another round of newspaper cutbacks, because if smaller communities will support viable hyperlocal community websites there's potentially more jobs covering the news in those communities to go around.

In the US last year Patch.com hired more than 600 journalists (probably the most of any company in 2010) to roll out more than 500 sites to towns with populations between 15,000 and 75,000 people. But in the UK new businesses are already emerging with a plan for publishing hyperlocal community sites, with original news reporting, in towns of 5,000 people or fewer.  

News International seeks to establish a print/online equivalence that simply isn't there

So the latest numbers are in for the Times paywall. Now eight months old it deserves, perhaps, to no longer be dubbed an experiment. Charging for people to look at the Times online is now business as usual in the Wapping fortress, and business as usual is doing...ok. Over at Paidcontent there's a copy of the full release and Robert Andrews takes a more detailed look at what the numbers mean.

At the end of the first four months behind a paywall they'd racked up 50,000 actual subscribers (people paying £2 a week) plus 105,000 other "digital purchase events" - people buying a one-day pass. Four more months on, at the end of Feb, they have a total of 79,000 monthly subscribers and a total 222,000 "sales of digital products" - people buying a one-day pass, plus sales of the Sunday Times iPad app. So, as Paidcontent notes, subscription sales have slowed down but sales overall have increased.

New York Times experiments with perverse incentives

The New York Times paywall (don't call it a paywall? Right...) is a strategic error, and not even a very complicated one.

So there's some science behind it, and the number of articles you can see before you have to pay (20) has been calculated from actual traffic data rather than just pulled out of the air, which is a good start. And it's always good to see a news org putting in some serious R&D, which at $40 million just to develop NYT's paywall definitely counts. It's not as if there's nothing about the move to like - it's considerably more thoughtful and nuanced than TimesSelect or the other, many, failed experiments in charging for (non-porn, non-finance) content that have failed over the past decade and a half.

What's so bad about content farms anyway?

At Techdirt guest blogger Chas Edwards writes that the problem with content farms (and by content farms, let's be clear, we mean Demand Media) is about ownership. "Even if Demand Media keeps most of the money they’re making from their websites, they might dodge the Google bullet if they can improve content quality by giving their contributors a sense of ownership over what they create." 

I think it's about the motive. The desire to create (and share) good content is motivated by knowledge, enthusiasm, passion. The writers on the content farms might occasionally, by sheer statistical accident or serendipity, be asked to write about something that moves them, but generally the motive is pure profit. The farm identifies a content niche that it wants to fill because people are searching on that term right now. The writer gets paid a tiny amount of money for knocking out a few hundred words that are just good enough to fill that need (see here an account of one writer's summer on a content farm). And so, necessarilly, the average content is poor because the motive is poor.

Photo by Steven Ashman on Geograph.

AOL's big bet that advertisers will get a bit (but not a lot) smarter

So AOL buys HuffPo for $315m, valuing (as Chris Tolles points out) their 26m ComScore users at $12 each. We're not (yet) in the Broadcast.com league but it's still an excitingly bubbly valuation at ten times 2010 revenues, five times even management's own 2011 revenue forecast and god knows what multiple of the presumably nominal profitability they claim the site achieved in the fifth year since it launched.

AOL is betting the farm on monetising professionally-created content via display advertising. That's a big bet, but of course for AOL it's not a new one - acquiring HuffPo is simply a continuation of the strategy that AOL has been pursuing since it parted company with Time Warner. Engadget, Politics Daily, Techcrunch and especially Patch are all long bets on paying writers and then serving display ads over the results, and if that's the strategy this is a smart push for more of the same.

Everything useful I know about The Daily

Everything that's not about the Egyptian revolution today has been about the launch of the Daily. Here's everything I know about it, which I suspect is a fair summary of what anyone outside News Corp itself knows about it.

News organisations need to experiment with new digital ideas. This is one, and it seems to have proper funding an impressive talent pool. Good.

News Corp hasn't achieved any sustainable successes in digital, but then again a lot of the plays they've made have been into fickle, hit-and-miss spaces where they've lost out to world-class competition. News Corp is pretty good at (a certain type of) news though and could make something work here.

No-one knows yet what the take-up will be. If News Corp's statements about the take-up of the paid Times website are anything to go by we'll have to work out actual take-up for ourselves a few months down the line, but until there's some numbers to look at I'm just going to go ahead and admit that I don't know how many people will buy it. And neither does anyone else. 

Strange redefinition of public interest

As Jon Slattery reports, the Sun today leads (leads!) with a blistering condemnation of an Appeals Court ruling that prevents the paper naming a prominent sportsman they would like to accuse of sexual infidelity. 

The article is astonishing in its fury and tone, denouncing Britain as "a judicial banana republic" and claiming that "it is vital for democracy we know the names of those who go to court to have newspapers silenced". 

Unmitigated twaddle. This is not a corrupt politician or CEO who has pushed through an unpopular public agenda by masquerading as a family values campaigner. It's some guy who kicks a ball, or possibly hits one with a stick, for the lightest of light entertainment. The matter is of potentially legitimate interest to his allegedly various partners, and perhaps whichever companies happen to sponsor him. The Sun's fury is the fury of an infant denied its favourite noisy toy at bedtime, and dressing the matter up as a crusade for democracy and freedom of the press shouldn't fool even that paper's readership.

(Photo nicked from Jon's blog)

Good news for journalism: no way is Demand Media really worth more than the New York Times

When Demand Media floated earlier this week it started out at $17 a share, rocketed on first day trading to a high of $24, and even after falling back to trade around $22 last night its market cap of $1.8bn still makes it worth more than the New York Times. It's that "worth more than the New York Times" bit that evidently set journalists' teeth on edge - if the US paper of record is worth less than a five-year-old content farm, what hope for journalism?

It's neither surprising nor informative that journalists almost universally hate Demand Media and want it to fail. People who make a living from writing and take pride in crafting sentences are hardly disinterested observers of a content farm that treats articles like commodities and has driven down the price of an article to $15.

The good news for journalism is that there is no rational basis for believing that Demand Media is worth more than the New York Times. Looking at the numbers behind the IPO, Demand Media's almost $2bn valuation doesn't make an iota of sense. 

Even as Egypt burns, horse sex is still the greatest news story on earth

I know, I know. There's real, serious news to talk about today. Egypt is in flames. Almost anywhere could be next. It looks like the Egyptian army has just changed sides and joined the protestors, which effectively marks the end of the Mubarak government. But I've been covering the absurd popularity of news stories about people having sex with horses for a long time, dammit, and even today I'm not passing up this one.

On the BBC News website today, the most-read story is still (or one might even say again) an article about a man having sex with a horse. The Egyptian revolution - as it surely must now be called - stands in second place. 

This is very far from being the first time a news article about humans having sex with animals has led the news agenda.