Subscription publishers (still) have platform problems

Platforms played integral roles in helping publishers scale audiences. Now, they’re helping with publishers’ subscription ambitions, with new product features and programs to educate publishers just starting to pursue consumer revenue.

While publishers are heartened by these steps, many are wary. Not only do platforms have a history of changing their minds about how their products work, they are also limited in their ability to help publishers’ subscription efforts. Here is a rundown of what the platforms have done and the gripes that publishers still have with them. Continue reading “Subscription publishers (still) have platform problems”

The Platform Fallacy

It seems like every business discussion today is just counting the seconds before the term “platform” comes up. Books and articles are written, pundits swoon and conference audiences nod and exchange glances in knowing agreement. Everyone, it seems, wants to transform their business into a platform. Yet take the argument to its logical conclusion and the message becomes problematic. Platforms, as many have observed, function as multi-sided markets and therefore must connect value to value. So if everybody becomes a platform, who actually creates the value to make a vibrant marketplace? Continue reading “The Platform Fallacy”

Viewpoint: Platforms are the new context that matter

Barry Lowenthal is president of The Media Kitchen.

I’ve always believed context counts. It helps consumers understand why one brand is different from another. When a brand chooses a particular environment, it’s an indication of the brand’s values and beliefs. If a brand advertises in Vogue, it says the brand is very fashionable. It says a lot about a brand if they decide to run on Rush Limbaugh’s show, et cetera. But context is changing, partly because where we consume media and the media format most brands use has changed, namely, to video on platforms like Facebook. Continue reading “Viewpoint: Platforms are the new context that matter”

Facebook Declines, Google Grows as Battle for News Audiences Continues

As an analytics provider for hundreds of the web’s leading publishers, we have a bird’s-eye view of trends in web-wide news consumption. This vantage revealed an industry-wide shift in how readers find news in June 2015. Facebook overtook Google as the most important traffic source for publishers. And then, for two years the situation remained a stable duopoly, with Facebook and Google each sending publishers around 35% of their identified external referral traffic. Continue reading “Facebook Declines, Google Grows as Battle for News Audiences Continues”

The Washington Post on Reddit surprises users with its non-promotional, ultra helpful presence

Democracy dies in dankness.

That’s not a typo in the Washington Post’s Reddit profile: The Washington Post account is an avid poster of some pretty good memes and gifs. It’s got jokes. It’s also a sharer of everything from polling stories to breaking national security stories to lifestyle columns to geeky features to fact-checks, and a facilitator of, and participant in, AMAs. The official publisher account has been live since April of this year, shortly after the platform began allowing public profiles, and appears to have broken through Reddit’s tough anti-brand, anti-paywall shell.

Continue reading “The Washington Post on Reddit surprises users with its non-promotional, ultra helpful presence”

“Exceedingly generous”: Google will split revenue with publishers who use its new subscription tools

Google, an advertising giant, has been making nice with news publishers by developing a series of tools they can use to more precisely attract and target paid subscribers. (It also ended the first-click-free policy this month, allowing subscription-based publishers to choose how many articles to show to readers for free without search-ranking consequence.)

Google’s nice comes at a small business price for any publishers who might want to use the planned subscription tools, but the details are still being ironed out with publishers.

“It will obviously come down to what we think that business relationship should be, but bottom line, I think [revenue sharing] will be exceedingly generous [to news publishers],” Google’s head of news Richard Gingras told the Financial Times on Sunday. “In our ad environment, the rev shares are 70 per cent-plus. The rev shares [for publishers] will be significantly more generous than that.” (Google’s AdSense offers around a 70-30 split for publishers who use it to place ads on their sites.)

Gingras made sure to distinguish Google’s tack from Facebook’s “walled garden” approach, telling the FT that “unlike other participants in the environment, we’re not trying to own the publisher. If there are cases where we do cause the subscription to happen, we don’t want to own the customer. None of this changes the marketplace economics, people will pay for what they value.”

That “other participant in the environment” on Friday formally announced its test of news subscriptions models within its Instant Articles format, through which it won’t take any cut of the revenue from subscription signups (the subscription transaction and payment processing will take place entirely on the publishers’ site). Facebook’s subscription tests are Android-only, as it’s been wrestling with Apple over the past few months over Apple’s default 30 percent cut of “in-app sales,” Recode reported.

Platforms Are Transforming How We Need To Compete

In 1980, an obscure professor at Harvard Business School named Michael Porter published Competitive Strategy, which called for managers to drive efficiency by optimizing their firm’s value chain, maximize bargaining bargaining power with buyers and suppliers, while at the same time minimizing threats from new market entrants and substitute goods.

These concepts launched Porter into the top rank of strategic thinkers and profoundly influenced how businesses were run. Much like chess grandmasters, CEO’s worked to develop the right sequence of strategic moves that would position their firms to exert power and dominate their respective industries.

Yet much has changed in since then. Rather than an orderly marketplace defined by clear boundaries of industry and geography, we operate in a semantic economy where everything is connected. The most important assets are no longer the ones we control, but those that reside in ecosystems that we access through platforms. That changes the game entirely.

Going From Research & Develop To Connect & Develop

Procter & Gamble is exactly the type of company that Porter had in mind when he formulated his theory of competition. Through its efficient supply chain and world class marketing operation, it created massive bargaining power with buyers and suppliers, while its century long commitment to R&D helped it fend off potential competitors and grow revenues.

However, in the late 90’s, when Nabil Sakkab took over as Senior Vice President of Research and Development at the Fabric Care division, he saw that even the resources of a giant like P&G were no longer enough to keep growth going. He quickly realized that he had to do something radically different.

So rather than looking to increase his bargaining power with suppliers, he did something that had the potential to undercut it. He began working closely with suppliers to solve key research challenges. It worked so well that the process was expanded into P&G’s Connect & Develop program, which has made open innovation a top priority.

Today, Connect & Develop is clearly an unqualified success. Sakkab was able to meet the goals he set out to achieve for his division, helping to grow the business by 50% while reducing R&D resources by 25% by the time he moved to a corporate role in 2005. It also led to the led to development of Swiffer and to the expansion of Febreze, both are now billion dollar brands.

Why Open Beats Closed

Around the time that Sakkab began thinking about partnering with suppliers to solve problems, executives at Eli Lilly were thinking about how they could leverage the Internet. Alph Bingham, who was a responsible for managing the pharmaceutical giant’s portfolio of research, was invited to a brainstorming session to stimulate new ideas.

Bingham was already fascinated with Linux, the open source operating system that Linus Torvalds had released in 1991, and how an ecosystem of thousands of volunteers were able to create and advance complex software that could compete with the best proprietary products. He thought that there could be great potential for a “Linux with a bounty” that could solve some of the tough problems that Eli Lilly hadn’t been able to find an answer for.

The Innocentive platform went live in June 2001 with 21 problems, many of which the company had been working on for years. Although the bounties were small in the context of the pharmaceutical industry — $20,000 — $25,000 — by the end of the year a third of them were solved. It was an astounding success!

It soon became clear that more challenges on the site would attract more solvers, so they started recruiting other companies to the platform. When results improved, they even began inviting competitors to post challenges as well. Today, Innocentive has over 100,000 solvers that work out hundreds of problems so tough that even the smartest companies can’t crack them.

In 2005, Eli Lilly spun out InnoCentive as a fully independent platform. It only attracted about $30 million — not a material event for a company that counts its revenues in the billions. Being able to access a fully open platform was worth more to it than being able to own one it could control.

Making Common Cause With The Barbarians At The Gate

While Linux may have inspired Alph Bingham, Microsoft CEO Steve Ballmer was considerably less sanguine. In fact, he called it a cancer in 2001 and vowed to fight it tooth and nail.

Yet things had changed by 2010. When Microsoft launched Kinect for the Xbox in 2010 it quickly became the hottest consumer device ever, selling 8 million units in just the first two months. Almost as soon as it was launched, hackers started fiddling with it, altering its capabilities to do things that Microsoft never intended.

Historically, Microsoft would have had its lawyers crank out cease and desist orders. But it didn’t. In fact, the tech giant embraced the hackers, altering the USB cable to allow for more developmental flexibility, releasing a software development kit (SDK) in order to make modification easier and even creating an incubator to offer financing for the best hacks.

As for Linux, apparently Microsoft now loves it and has built its new Azure cloud platform around the open source operating system. It seems now that even in Redmond it is clear that power has shifted from corporations to platforms.

Collaboration Is The New Competitive Advantage

Clearly, much has changed since Porter wrote his book nearly a half century ago. Today, we live in a networked world and competitive advantage is no longer the sum of all efficiencies, but the sum of all connections. Strategy, therefore, must be focused on widening and deepening links to resources outside the firm.

So we increasingly need to use platforms to access ecosystems of talent, technology and information. Even the internal capabilities of corporate giants like Procter & Gamble, Eli Lilly and Microsoft pale in comparison to that which can be found outside the boundaries of an organization. As Bill Joy put it, “no matter who you are, most of the smartest people work for someone else.”

Power, therefore, no longer resides at the top of the value chain, but at the center of networks. That’s why collaboration is becoming a new source of competitive advantage. Today, the best way to become a dominant player is to become an indispensable partner. Nobody, no matter what assets they control, can afford to go it alone anymore.

So this new era of platforms offers great opportunities, but also great challenges. We now need to design our organizations for agility, empathy and interconnectedness, rather than for scale, dominance and efficiency.

This article has been adapted from my book, Mapping Innovation

The perils of platforms

It’s better, isn’t it, when we are able to feel comfortable as we are, rather than trying to be something we’re not?

“The average publisher may be smaller than the big guys, but they’re unique. Publishers must embrace what makes them differentiated, and build healthy, direct relationships with an audience that really cares. “

Platforms and Publishers: Is the Glass Half Empty?

The tone of a new report released by the Tow Center for Digital Journalism, “The Platform Press: How Silicon Valley reengineered journalism,” is striking.

The report, which outlines the effects of third-party distribution on news publishers, is at times dark (“Many in the room likely felt empathy with the watermelon, as their businesses were being squeezed slowly to the point of implosion by external forces beyond their control.”) and urgent (“In the wake of the election, we have an immediate opportunity to turn the attention focused on tech power and journalism into action.”).

The cumulative findings seem to stack up against publishers’ best interests, highlighting how platforms have encroached on core activities of publishers, the proliferation of fake news, and the influence of social platforms on editorial content. How optimistic should publishers be about the results of a convergence between journalism and platforms?

We had a chance to hear more about the topic at a recent panel discussion between speakers from the Tow Center for Digital Journalism (including Emily Bell, one of the authors of the report), The Intercept, and the Society of Professional Journalists.

Consequences of Platforms Behaving Like Publishers

Social platforms have had concrete effects on newsrooms. Betsy Reed, editor-in-chief of The Intercept, explained, “Social media is not only where we distribute our journalism; it’s where we do our journalism.”

speakers at the Lunch & Learn

Speakers on the panel discussing the power dynamic between journalism and Silicon Valley.

Platforms have impacted how journalists frame and source stories. Nausicaa Renner, web editor at the Columbia Journalism Review, underscores how social platforms influence the way newsrooms allocate resources, especially in response to the development of new tools and platform features. In a fundamental way, according to the Tow Center report, “The influence of social platforms shapes the journalism itself.”

“Publishers are making micro-adjustments on every story to achieve a better fit or better performance on each social outlet. This inevitably changes the presentation and tone of the journalism itself.” —“The Platform Press: How Silicon Valley reengineered journalism”

Betsy Reed said, “We very much think about social media when we’re framing a piece.” She has found “the kind of content that tends to be shareable and travels is on the simpler side,” though “high emotional content” that is “very complex, and erudite, and deeply argued, and informed…travels like crazy on social networks.” Adapting the way a piece is framed to optimize its success on social platforms isn’t necessarily detrimental to the writing process:

“We’ll try to take an argumentative tone. We’ll try to connect emotionally with an audience with the framing of a story and I don’t think that that’s necessarily a bad thing for journalism.” —Betsy Reed, editor-in-chief of The Intercept

A section header in the Tow Center report refers to “The Publishers’ Dilemma.” On the one hand, relying on platforms for distribution means publishers face a lack of transparency, unreliable metrics, and the changeability of algorithms and other features. But without third-party distribution, publishers relinquish an opportunity to connect with and grow their audience.

What can publishers do when confronted with this catch-22? Going forward, the panelists highlighted the importance of urging transparency and varying business models.

Increased Transparency from Third-Party Platforms

Currently, a lack of transparency from platforms is contributing to the friction with publishers. The Tow Center report called out the “single most controversial, influential, and secretive algorithm in the world is the one that drives the Facebook News Feed.”

Are the steps being taken towards transparency going in the right direction? Andrew M. Seaman, senior medical journalist for Reuters and ethics committee chairperson for the Society of Professional Journalists, thinks it’s a good sign that Facebook wants to help, but there has to be more of a dialogue. If the platform moves forward without collaborating with news publishers, the result will be “Facebook’s idea of a solution and not probably what’s best for journalism and the public.”

Emily Bell, director of the Tow Center for Digital Journalism at Columbia University, had a more optimistic view. She reiterated that Facebook “has shifted a long way in just three or four months.”

panel discussion

Panelists at The Intercept’s office on April 6, 2017.

At this time, having an “engaged conversation” with platform companies—not just Facebook—is critical. “The founders of Facebook and Google are not monsters,” Emily said, and there’s an opportunity for a dialogue that will continue to encourage transparency and a role for platforms in protecting journalism.

Encouraging Direct Reader Support

Advertising works when scale is involved, and platforms drive scale. Publishers are gravitating away from focusing on scale towards focusing on loyalty and direct reader support.

Betsy Reed said, “One of the financial models that I think is most promising and potentially healthy for journalism involves direct reader support.” Subscription models and donations to nonprofit newsrooms help build a community around journalism.

Andrew Seaman agreed, saying, “One of the things that is sort of heartening to me is that if we move to a subscription model for content that is going to be delivered visually, we get better journalism.” From an ethics perspective, better quality journalism rises to the top in this model.

Andrew also stressed the work that needs to go into affecting progress: “We need to do groundwork to actually improve media literacy and rebuild trust in journalism.”

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How The New York Times, CNN, and The Huffington Post approach publishing on platforms

Publishing used to be relatively simple. You published a newspaper once a day or produced a nightly newscast. Even with the advent of the Internet things were fairly straightforward: You had a website and posted your coverage there. But as platforms — from Facebook and Snapchat to messaging platforms such as Kik and Line — become more ubiquitous, news organizations now have to decide where they want to publish and how they want to present their coverage on these platforms.

A study out this week from the Tow Center for Digital Journalism at Columbia University examines how platforms have changed journalism, and while the entire 25,455-word report is worth reading, one particularly interesting section looks at how news outlets are choosing to publish (or not publish) across a variety of platforms.

The report compares how The New York Times, CNN, and The Huffington Post utilized platforms during a week in early February. In that span, each outlet posted to about 10 different platforms. The Times and HuffPo each posted about 1,660 times across the various platforms. CNN, however, published more than 2,800 stories, about 40 percent more than the other two.

The Tow report defines two primary different types of platform-based content: native and networked. Native content includes entities such as Snapchat Discover and Stories, Facebook Instant Articles, or Apple News. These formats live entirely within the walled gardens of the platforms. Networked content, meanwhile, links back to the news organizations’ own sites.

The study examined 14 publishers and found that during the week of Feb. 6, they posted 12,341 pieces of networked content and 11,481 pieces of native content.

“While publishers all need to have a presence across a broad range of platforms, how they distribute their content — and, in particular, the amount they ‘give away’ to platforms in the form of native content — differs considerably,” the study said.

During the week of February 6, two-thirds of The Huffington Post’s distributed content was posted in native formats. That includes 695 stories on Apple News and 305 Facebook posts, which include Instant Articles, Live Video, and other formats. “These native Facebook posts also represent 98 percent of Huffington Post’s total Facebook posts,” the study found.

CNN similarly posted 59 percent of its content natively. That included 1,016 Apple News Articles, 948 tweets, and 278 YouTube videos. The report also noted that “CNN’s concerted effort to reach younger audiences is also evident in its Snapchat Discover channel, on which we saw a shift away from scrollable articles repurposed from to more bitesize news cards, and its ongoing commitment to chat app LINE.”

Meanwhile, only 16 percent of the Times’ posts were native. The Times was one of a handful of news organizations that Facebook launched Instant Articles with in 2015, but the paper has since stopped publishing on Instant Articles. During the week that Tow measured the posts, just 19 percent of the Times’ 406 Facebook posts were native to the platform. The paper also posted 74 stories on Apple News.

Unlike The Huffington Post and CNN, the Times is focused on digital subscriptions and its main goal is to drive users back to its own platforms, which explains its reluctance to use native posts.

In a speech at a conference last year, Lydia Polgreen, who was then the editorial director of the Times’ global expansion effort and is now the editor of The Huffington Post, explained how the Times’ approach to platforms is different than other publishers.

Social platforms, especially Facebook, allow us to target our journalism to those most likely to want to pay for it. I believe that we are better off as Facebook’s happy customer than as its outgunned competitor in a David and Goliath fight for advertising dollars.

Yes, Facebook will try mightily to keep news consumers inside its platforms, via features like Instant Articles. Our job is to create experiences that will draw our most loyal users back, again and again, to our own products. So far, we seem to be succeeding at this. We will never be as big or financially successful as Facebook, but I believe we can run a thriving media company that can afford a lavishly funded news operation, as well as return value to our shareholders.

Many of the people the study’s authors — Emily Bell and Taylor Owen — interviewed reiterated that business models often determine how news organizations approach publishing on the platforms:

Jim Brady, founder and CEO of Billy Penn, a Philadelphia mobile news platform, said that when it came to Instant Articles, “I can afford to be a little bit more agnostic about it than someone whose revenue is tied to where the page view lies.” Gabe Dance, former managing editor of the not-for-profit news organization the Marshall Project said their resources were focused on “impact” because that’s what funders care about. And, after an unsuccessful experiment with NPR to host audio natively on the platform, Wright Bryan, senior editor for engagement, walked away wondering, “Does audio really fit a format like Facebook?”

One example of this is that the study showed that publishers’ attitudes toward Instant Articles in particular varied greatly. Outlets such as The Washington Post, Vox, and BuzzFeed News all posted more than 90 percent of their links as Instant Articles during the week of February 6. Meanwhile, Vice, Vice News, and Tronc papers the Chicago Tribune and the Los Angeles Times aren’t using Instant Articles at all.

“I think because there’s a continuous debate as to the very question: ‘What do you need to control, and what things do you not,’” Sterling Proffer, head of business strategy and development at Vice, told the study’s authors. “Going all in, solely on the platform to support your entire ecosystem in every way, is a big gamble.”

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