Monday, February 28, 2011

The internet delusion

I have already mentionned the seminal book from Evgueny Morozov on the "Internet Delusion". His focus is the complex relationship between Internet and Democracy and he shows, very convincingly, that the Web is just an instrument that can be used for or against freedom of speech.
The same delusion exists when I look at the interaction between Internet and Information. In the last issue of his, Frédéric Filloux delivers the last figures of the Washington Post Company. It shows, once more, that the prestigious daily has been losing money and circulation (less 7.5%) in 2010. What saves the Post is the earnings from its television branch and its huge education subsidiary, Kaplan.
And yet, people are eager for news, world news, local news but they are highly reluctant to pay as they already subscribe to an internet provider such as Orange or Free in France. The providers refuse to finance the news because they represent just a tiny share of the Web traffic. And advertising is present all over Internet and not only on news sites.
However, I am optimistic on the future of news services. They will be less on paper. It is possible that the system of daily newspapers is about to collapse and print publications will simply be offered once or twice a week. It is likeley that the way journalists work will change drastically as they are asked to provide both instant news on the Web and more in depth analysis on paper and Internet. The financing will include various contributions from advertising (display ads are thriving these last few months), subscriptions, private foundations that begin to play a role in the US. We'll find the money for doing other things. To morrow will be very different from to day.

Tuesday, February 15, 2011

The pitfalls of Internet

Recent books and events give us a lot of food for thought. Everything is moving at a tremendous speed. The obvious becomes dated or totally wrong. Internet is very far from a mature human activity but is it really human anymore ? Some examples.

A shattering book, just published in the US and already very commented by the media buzz: "The net delusion" from a young whiz kid, born in Belarus but teaching now in American universities : Evgueny Morozov.
Morozov knows a lot about authoritarian regimes. After all, when he was born, Soviet Union still existed. His point is that the Web is not the miraculous instrument that will promote democratic forces all over the world. Twitter and Facebook did not save from destruction the green movement in Iran in 2009. On the contrary, Facebook provides a lot of useful informations to the police states inquiring into their rebels lives. True, the book was written last year, before the Tunisian and Egyptian revolts which were orchestrated by Twitter. However, Morozov would probably remind his readers that history teaches us that a dictatorship collapses when its supporters, the army, the police, the government, stop fighting for it because they have lost their belief in the system. It is what happened in 1989. The end of the cold war was caused by the crisis of the socialist economy and the loss of faith of the communist parties leaders and it happened long before the discovery of the social networks. In a nutshell, Morozov states convincingly that internet is not the all powerful tool to build democracy in the rest of the world.
Another topic that puts in question the Web magic. Many internauts were deeply disturbed when they learnt that AOL was buying Huffington Post for 315 millions dollars while Twitter is valued at several billions. What these two services have in common? They are both thriving on free contributions brought by thousands of bloggers. Is it fair that the owners of these companies will make a fantastic amount of cash out of the unpaid work of numerous contributors? Once again, one has to face the persistant matter of the value of news. But what makes it worse is that social networks, including Facebook carry more and more pieces of news that they get for free and compete with the newspapers websites and pure players. From this point of view, the attempt of Murdoch to launch his paid electronic Daily on I-Pad must be closely watched. Will he make it? Is he to close to a print newspaper? We shall know soon.

Friday, February 4, 2011

the distribution quagmire

Newspapers and magazines are not only concerned by the crisis of Presstalis. They also have to find the best solutions for the delivery of their electronic products.
At the beginning, in the nineties, things were quite simple. The papers just needed to open a website where they would transfer most of their content, hoping for the public to rush and read their stuff on their computers. advertising was supposed to finance the whole process.

By now, things are more more complicated. If people, including young customers, keep a strong interest in news, it is far from obvious that they are looking on the Web for a copy of the print dailies or magazines. What they mostly want is to pick up what is of use for them on any site or any support.
And there are many possibilities. You can go to agregators such as Google or Yahoo news, or, in the US, Huffington post. They can look at videos on Yutube or Facebook. They can also connect with Twitters for instant and very short pieces of information.
The computer is no longer the only support. Smartphones and tablets offer many applications made by print publications or pure players.
Distribution networks are many. Big questions arise: who is getting the money, who has access to the customers or the subscribers? Telecom operators complain that their networks cannot afford to transfer huge quantities of data, mostly video and pictures. Apple has set up a system that allows it to get 30% of the money of the applications and keep for its own use the lists of the subscribers.
And yet there are rays of hope for the print industry. Big firms like Apple and Google have to face a stiff competition from various actors including Facebook. They will have to relent and agree with some compromises with newspapers and magazines that provide a very useful content. Moreover display advertising on Internet is growing with great speed: 40% in France last year. The New York Times gets now 25% of its advertising recepts from its Websites. Stronger publications, if they act together, should get better deals from their many partners.