May 11, 2003
The Times' clueless jab at new media
Steve Lohr in the Week in Review section of the Sunday NY Times: 'NewMedia': Ready for the Dustbin of History? Excerpt:
Mr. Diller and others have come to realize that two things succeed commercially on the World Wide Web: searching (like Google and Yahoo) and shopping (like Amazon.com and eBay).Is that what the digital revolution has come to? Back in the mid-1990's, it was going to cause a media revolution. The shift to bits, the 1's and 0's of computer code, would change everything, wrote Nicholas Negroponte, director of the M. I. T. Media Laboratory, in his 1995 best seller, "Being Digital." Book publishers, newspapers, magazines, television networks and movie studios ó all would be digitized, some would disappear, but vast new opportunities would arise.
The shift to bits promised more than just faster and cheaper distribution of the same old information and entertainment. The digital age held out the potential for a genuinely "new media." Pundits and media executives spoke about the prospect of everything from interactive television and shopping ó click the zapper to suggest a new story line or buy the sweater Jennifer Aniston was wearing on that "Friends" episode ó to donning goggles and suits to enter virtual worlds offering simulated sports, travel and sex.
But it hasn't happened. The companies that spent hugely on the "digital convergence" of media and Internet-era computing, AOL Time Warner and Vivendi Universal, which bought Mr. Diller's media properties, are in turmoil. And their visionary architects, Stephen M. Case at AOL Time Warner and Jean-Marie Messier at Vivendi Universal, have been ousted.
"In the early days, in the 1990's, we thought that media was the big application on the Web," said Michael Kinsley, who founded the online magazine Slate in 1996. "But it turned out to be e-commerce."
This is the most cock-eyed, clueless article I've read in the New York Times in some times, reeking of old media hubris. Michael Kinsley, despite years at the helm of Slate, still doesn't know what the online revolution has been all about. E-commerce? What imaginary island is he living on?
More nonsense from Kinsley:
Mr. Kinsley, who retired as editor in chief last year, concedes that Slate, while a widely respected magazine, has not yet developed into a distinctively new medium. "The multimedia component is our biggest failure, but it is a failure we share with everyone else," he said.
Actually, not true again. Slate has been notable online mostly for its refusal to veer from its roots in the elitist East Coast media establishment. If Slate has failed to embrace the ethos and sensibilities of the Web, it's not the Web's fault.
More nonsense from the article:
It's now obvious nobody yet knows how to create a successful, and truly new, medium.
It's true that the yelping of pundits who predicted that the digital revolutioin would doom the book publishing business or create fundamental changes in the movie or publishing industries overnight was off-base from the start, and if Lohr had confined his thesis to that subject, he might have been on target.
Instead, he points to large media conglomerates like AOL Time Warner and Vivendi -- and their failure to unlock the commercial treasures of the online space -- as evidence that "new media" has been a bust. As for Microsoft's failure in the media space proving that there's no future in new media, one can only laugh at the speciousness of the claim. (As a former editor with Microsoft, I know a little bit about the subject.) Microsoft's efforts proved only that a software company isn't cut out to be a player in the media space.
But the most obvious shortcomings of the article have to do with its jaw-dropping leaps in logic. How in God's name can Lohr and the Times overlook such basic truths as the following?:
- In the commercial space, the Times' web site attracts over 10 million unique visitors a month -- ten times its print numbers. The Times' new media division is raking in millions of dollars in profits each quarter. Microsoft's MSNBC.com and CNN.com have recently been attracting 5 million and 4 million users per day.
- Dozens of other online media companies are now turning a profit in the worst advertising downturn in history.
- Tens of millions of people get their news and large doses of their daily information from online sources. Young people, especially, are leaving old media in droves for, yep, new media.
- Apart from commercial enterprises, more than half a million weblogs have taken off and are increasingly becoming a staple of countless readers' daily routines. Yes, weblogs are new media.
The Times should be ashamed for publishing such a simple-minded tunnel vision view of the new media landscape. Of course, the Times won't let you email Lohr to offer your view.
RR Ryan said:
Simply put, I came across the NYT article via Matt Welch and Glenn Reynolds. It's exactly this sort of cluelessness, which is not limited to new media analysis, that transformed me from a NYT subscriber to a (very) occasional newsstand buyer.
Vin Crosbie said:
> How in God's name can Lohr and the Times
> overlook such basic truths as the following?:
> - In the commercial space, the Times' web site
> attracts over 10 million unique visitors a month
> -- ten times its print numbers.
The average of whom, according to the site's own figures (http://www.nytimes.com/adinfo/audience_overview.html), visited only six times per month (and that was a month when the country was at war! During more normal months the site's average visitation rate is only 4 times.) So, that's 60 million visits per month (10M x 6), or only about 2 million per day (10M x 60 / 30) worldwide -- slightly less than double a printed edition that is effectively circulated only within North America.
> The Times' new media division is raking in
> millions of dollars in profits each quarter.
Not really. Remove from the $3M annual profit and $72M annual gross the $15M in Nexis and other syndication revenue that pre-dates public access to the Internet and that NYT Digital inherited. From the revenues from its own Internet efforts, NYTD isn't profitable. And what positive cash flow it's reporting, even with the pre-Internet revenues, came only after NYTD cut its staffing by 40%.
Moreover, a Borrell Associates study issued last month, with the cooperation of NYTD and other major online newspaper publishers, reported that 73% of the average U.S. online newspaper's revenues comes from classified ad, half of which is in the form of upsells (i.e., accounting transfers) from the newsprint editions' classified staffs. What a gross revenue crutch!
> Dozens of other online media companies are now
> turning a profit in the worst advertising
> downturn in history.
Your count is exaggerated only by about seven. The number of the 1,400+ U.S. online newspapers that are truly cash flow positive on their own accord -- after seven years of Web publishing! -- can be counted on the fingers of one hand. For one analysis, see http://www.ojr.org/ojr/future/1026348767.php
Moreover, how many of these sites -- even after five years of Web publishing -- were profitable in 1999, during and up to the height of the greatest economic (and media) boom in U.S. history. The fact that most aren't profitable now during a recession conveniently masks the fact that they weren't profitable -- even after five years -- during the greatest economic boom in our history
> Microsoft's MSNBC.com and CNN.com have recently
> been attracting 5 million and 4 million users
> per day.
About the same as the daily readership of London's News of the World broadsheet newspaper. Of course, those dot-coms don't print a Page 3 bird.
> Tens of millions of people get their news and
> large doses of their daily information from
> online sources. Young people, especially, are
> leaving old media in droves for, yep, new media.
Yep, tens of millions. Printed newspaper readership in the U.S. was last (1997) estimated at 112 million (http://www.naa.org/artpage.cfm?AID=1613&SID=1022), although I'd estimate that has dropped to about 105 by now. As for young people leaving old media for the Internet, certainly. But what news sites are they using? And are they using those site for news as seldom as they use print editions?
> - Apart from commercial enterprises, more than
> half a million weblogs have taken off and are
> increasingly becoming a staple of countless
> readers' daily routines. Yes, weblogs are new
> media.
They are new media. But precious few have the veracity of traditional media and, also, I tend to agree with Clay Shirky that precious few are widely read.
The examples that Lohr used in his article (AOL, Vivendi, etc.) indeed were lousy ones, but probably the only ones that the million print readers of the Sunday NYT could understand (they wouldn't have heard about or comprehended Gawker, Slashdot, and other more accurate examples that nonetheless have the flaws I list above). If you known Lohr, you'll know that he knows that the examples he gave were slightly clueless.
But his overall point is quite sound: New Media was supposed to have replaced or largely succeeded Traditional Media by 2003. It didn't.
It will, but not as the Web or Weblogs or RSS (there are fundamental problems with using these technologies to disseminate news), and not for many more years.
Revolutionary change generally comes in three, Hegelian phases: The initial revolutionary idea, the reactionary swipe against that idea, and the final ineluctible invasive victory by that idea. We've now begun the second phase. Lohr's article is a signal of that.
JD said:
Worthy points, Vin, but somewhat argumentative. "But his overall point is quite sound: New Media was supposed to have replaced or largely succeeded Traditional Media by 2003."
Sorry, I didn't get that memo. Did everyone else?
Yes, the uptake to new media will be a slow and long process, but it's inexorable -- and hardly worthy of the "dustbin of history" premise of the Times' article.
