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YouTube and the coming beatdown of TV ad revenues

YouTube is becoming one of those “gradually, then all at once” phenomena – like the rise of always-on high-speed internet a decade ago, or the gradual-then-sudden collapse of newspaper ad revenues from ’05-’08.

When a colleague and I first negotiated a YouTube syndication/revenue share agreement back in 2007, most of the media world treated YouTube as a novelty, a place for keyboard cats and 14-year-olds’ rants. Certainly it would never be a venue for serious content, or for real ad dollars.

Today? Media companies are falling over themselves to expand their YT presence. Talent is flocking to its burgeoning content channels. A knowing acquaintance talks of regularly cashing $10,000-a-month revenue-share checks from YouTube for his guerrilla content operation – and of people he knows who often add a zero to that figure. (Why no link? I’m respecting a confidence, folks.)

Oh, and before my friends on the broadcast side of the media business feel too smug about their record-breaking political season?

Local TV makes strong revenues (and high rates) because of its oligopoly power over geographically targeted video ads – and because there are inherent limits on its ad inventory (only 24 hours a day, only certain hours during the day with high viewership around local content, only x minutes of ads per hour). To media companies, those both feel like protection against the sort of collapse that roiled the newspaper business.

Except:

We all know the Obama campaign in particular spent boatloads on YouTube this cycle.

And I just saw my first-ever LOCAL business running a pre-roll on YouTube. Something is afoot when local businesses in the sleepy backwater of Nielsen DMA 43 start changing their ad-buying patterns.

I’m not predicting an imminent collapse in broadcast revenues. (Ad dollars do follow the audience – but usually much more slowly than new ventures would like.) But YouTube has nearly unlimited ad inventory, and breathtaking targeting abilities. Change is coming.

 

Required reading: The birth of Red Eye

From the inestimable Owen Youngman, the sort who always says his mood has never been better in spite of whatever crisis is breaking.

Here he outlines the birth of Red Eye, the youth-focused commuter paper of The Chicago Tribune, and a classic example of disruptive and lean product innovation at work.

About the Great CMS Quest (and that AdWeek piece)

An article on AdWeek has gotten more than a little attention this week. It talks about Content Management Systems – the big hunks o’ technology that drive websites and print publications – and how most of them, well, stink.

It’s prompted some hilarious email threads, and more than a few bad memories, among some of us who’ve been at this digital-journalism thing for awhile.  But the piece misses some crucial points, I think.

First, journopreneurs should just ignore it. It focuses mostly on the difficulties in finding a single system to produce both traditional products and digital. Digital-only operations don’t have a traditional product to worry about.

So lash together a site using WordPress and a theme you like, and focus on building great content and an audience. Yes, as the piece notes, open-source systems can get creaky when put under enormous loads. Worry about that when you’re doing millions of page views a month.

(By that time, the Knight-funded Armstrong CMS might solve the problem for you. It’s already quite good, and could become the open-source solution for news if a large-enough community adopts and supports it.)

Second, I’d note that most of the legendary failures cited in the piece (and a couple others I’ve seen up close that are safely hidden in corporate files somewhere) have this in common: They start with existing print workflows and try to staple on web functionality.

That’s a huge mistake because of the differences in how consumers use the different media. The web is fluid. It requires – and benefits from – constant updating. Print is static – all efforts are aimed at a single time of publication, perhaps with some slight variations for regional editions.

Forcing one production team to adopt the other’s workflow doesn’t work. Keeping separate systems for the web and the legacy product is a pain for reporters and editors.

Hence the quest for the mythical Perfect Solution (which apparently is hiding with the unicorns, chucacabras and Super Bowl-champion Minnesota Vikings teams).

The perfect, of course, is the enemy of the practical. So I humbly suggest you dump the idea of One Perfect System. Instead, create ways for your separate print and digital systems to talk to each other.

We won’t get too geeky here (largely because I hit the limits of my technical knowledge pretty quickly). But ask your technology team if they’ve thought of breaking up the problem into a (meta)data layer, an abstraction layer and a presentation layer. If your geeks don’t know what that all means, tell them to find out – or fire them and hire people who do. (They really do exist.)*

(*And to save Scott Karp the trouble of commenting, look too at middleware solutions that can link content from your web system back to your print CMS. It’s far easier, and at least 1,000 times cheaper, than that Unicorn-designed Perfect Solution someone is trying to sell you.)

Fellowship season

Eleven years ago, I caught the break of my life: I got a one-year Knight Fellowship at Stanford. (I still find it so shocking that I rarely mention it. Friends say it usually takes at least 18 seconds before I bring it up in conversation.)

I’m unabashed about how grateful I am to the program – whatever I’ve achieved in the past 10 years of my career is due solely to what I learned on that fellowship.  Jim Bettinger and Dawn Garcia are to be commended for dramatically shifting the program’s focus to address the radical changes facing our industry.

Until two years ago, the program operated much like the Nieman Fellowships at Harvard, or the Knight-Wallace program at Michigan: Pitch us an idea that will make you a better journalist. It might be Internet economics (my topic); it might be studying the narrative form of American musical theater.

Stanford has unique qualities, however – it’s a world-class university in the heart of Silicon Valley, a place that has consistently spawned great companies.  Now the Knight program asks applicants to submit ideas that “focus on innovation, entrepreneurship and leadership to foster high quality journalism during a time of profound transformation.”

For several years, I’ve gotten to peek at the stack of ideas as one of several former fellows who help the program staff screen applications (nearly 150 U.S. applications for the 2010-11 class). We completed that initial screening last week. There’s still a lengthy process of interviews and review by the program committee before next year’s fellows are announced in April.

Still, there are several useful lessons in this year’s stack, applicable not only to future Knights, but to anyone who aspires to entrepreneurial journalism. (All opinions are my own, of course, not those of the program.):

What was great:

  •  A “just do it” attitude: Personally, I loved the people whose proposals (and, usually, their current work) showed a bias to action. They launch stuff knowing it isn’t perfect, then adjust based on the audience reaction. That’s a far cry from the attitude most of us developed in the days of monopoly outlets. (I remember an editor screaming at us we should never experiment on our readers. Sounds reasonable – but in practice, it meants we never tried anything new.) A thousand start-ups are experimenting out there – and an axiom of the startup world is that with enough experiments, someone will figure out what works.
  • Awareness of the trends in technology. You don’t need to be a technologist to get a fellowship – but it sure helps to know broad trends in technology, especially as they affect journalism.  The best applicants understood that cheap tech gives anyone the ability to publish; and that it’s getting easier by the day to organize and display vast pools of raw data.
  • It’s not just about the World Wide Web anymore. (Doesn’t the very phrase “World Wide Web” sound archaic?) Several applicants noted that publishers need to deliver information when, where and how consumers want it – and increasingly, that means mobile devices. The best name-checked the iPad specifically.
  • Recognition that Stanford is a candy store of knowledge. The best went out of their way to discover the particular professors, classes and research going on at Stanford related to the applicant’s idea. (Hint: If you’re thinking of applying for a fellowship anywhere in the future, write that one down.)

What wasn’t so great:

  • Applicants who focused their proposals on “saving newspapers as we know them,” rather than saving journalism. There’s a difference.
  • Those who acted as if the fellowship is a lifetime achievement award: “I’ve done this and this and this – so someone somewhere owes me a sabbatical.”
  • A corollary: “I need a year off to learn all this new, foreign digital stuff.” Stanford is a marvelous place to learn about the interplay of technology and storytelling – but basic knowledge can be acquired anywhere. Start with the people on the digital side of your current or former shop.  And don’t make the mistake of implying that they’re not journalists because they sometimes hold different opinions than you. (Someone did that in a fellowship application a year ago. Guess what? They didn’t get a fellowship.)
  • “At the end of the year, I’ll have produced a report.” To steal a line from my former colleague Chris Krewson: The future of journalism isn’t going to be invented at a conference. Studies are helpful, of course – but only when they lead to actual publications that can be tested in the marketplace.

Best of luck to the Knight class of 2011. I’m insanely jealous of you all.