Monday, November 28, 2016

If you don't have money, use social capital

Image from MCMcapital.com
Digital media entrepreneurs often lack the financial capital and business savvy to launch and sustain a high-quality news operation.

They could improve their reach, impact, and sustainability if they knew how to harness social capital in the form of partnerships with universities, broadcasters, foundations, for-profits, and nonprofit organizations.

Most digital media startups have trouble raising financial capital. They can't get loans because they don't have anything to pledge as collateral other than their personal home and auto. They can't get investors interested because they lack a business model with a promise of profit.

 What is their social capital?
  • A veteran journalist has a reputation in the community as a trusted source of information. Their name is their brand with readers and potential sponsors.
  • They may have a relationship with a university where they have occasionally lectured or even taught entire courses. A university could provide volunteer labor, equipment, and even broadcasting facilities for a startup. The startup would be a teaching laboratory for students.
  • A journalist may have been a contributor to a  radio or television broadcast outlet that would partner to produce and distribute news and information.
  • A journalist's social media presence -- Twitter, Facebook, Instagram, Snapchat, etc. -- represents a community built around a personal brand. And this social capital could also be converted into financial capital -- sponsorships, subscriptions, other sales. 
The need

Communities around the world have lost accountability journalism as a result of digital disruption and the global financial crisis. Often, laid-off journalists have tried to replace the lost coverage by launching their own digital media.

The vast majority of digital news startups are barely surviving. They lack people trained in business, technology, and multimedia production, as I chronicled in a recent paper.

Many of their weaknesses might be offset by partnering with organizations that could provide expertise, access to equipment and facilities, and manpower.

In exchange, a news startup could offer partners the opportunity to participate in a high-impact community service project, namely informing the public about topics that matter to them.

Research: case studies

I am planning to produce case studies of successful partnerships because real-world examples are one of the best ways to transfer knowledge effectively. (Know of any? Let me know at @jamesbreiner.)

Journalism today is becoming less of a business and more of a public service, but it is a public service that has to be profitable, as Ignacio Escolar, founder of Eldiario.es in Spain, has so eloquently put it. It is this transformation of journalism organizations into a hybrid of community assets and business assets that I want to help accelerate.

Related:

Loyal users will pay for watchdog journalism  
Panama Papers: Lone-wolf investigative journalists form a pack

Tuesday, November 22, 2016

Why fake news is beating traditional news

Traditional news organizations made a deal with the devil when they turned to social media and search-engine optimization to gain digital audience and revenue.

They recruited "community managers" to raise their profile on Facebook, Twitter, Instagram, and the like. They tagged their articles to raise them in search results.

The devilish side of the deal was that presumably ethical news media were trying to sell credibility and verified information -- facts -- within a turbulent ocean of emotion. On social media, feelings are more important than facts. People want to declare who they are and what they believe. So they "like" and share stuff that reinforces their view of who they are and what they agree with. Emotions predominate over facts.

Articles that are popular, shared, and linked to will rise to the top of search results in Google and other search engines. It's easy to share or like something that reinforces your view of who you are.

Misreading the data

So the post-election idea now being championed by many journalists that Facebook and other social media should be fact-checked, and that fake news stories could be eliminated from social media shows they misunderstand the new media dynamics.

Tuesday, November 8, 2016

Media value lies in relationships, not scale

Amid all the news about how Facebook and Google are devouring the world, I would like to sound a note of optimism for digital news media. But first, let's acknowledge the bad news.

It is true that the munch munch munch you are hearing is the sound of the Internet giants biting off big slices of the digital advertising pie. However, much of that has been at the expense of traditional news media. There is an opportunity for digital-only news media to fill the gap in local coverage.

In the short term, this is not something to celebrate, since the decline of newspapers in particular has led to a big loss in watchdog journalism on the local level. The chart below, which has been published widely, shows the rise of Facebook and Google's advertising revenue concurrent with the decline in newspaper ad revenue.

With information from Thomas Baekdal @baekdal and Ben Thompson @benthompson of Stratechery.com.

Monday, October 17, 2016

Sage advice from Spain's 'mastermind of startups'

Antai Venture Builder nurtures startups. Photo by Caterina Barjau, in El Pais.
Miguel Vicente was an industrial engineer with a hefty salary when he decided to throw it all overboard nine years ago and launch a coupon site.

He gave some memorable quotes that should be heeded by any entrepreneur during an interview with Daniel Verdu of Spain's prestige daily newspaper, El Pais.

"It's like the two pills in Matrix, you have two options: the blue one is for a secure paycheck at the end of the month, the support of a big group that will help you, nice vacations and weekends. And the red pill is the one for entrepreneurs: you won't have anything you had before and you won't even know if you will be around the next day. But you will be the owner of your destiny. That feeling, plus the notion that you cannot fail, makes you pull out the best of what you have inside." 
His first startup was called Lets-Bonus. He sold that and eventually he and two partners launched Wallapop, a mobile app with location technology for buying and selling second-hand goods with nearby users. It is similar to a CraigsList for Spain and has reportedly attracted more than $100 million in investment. Some speculate that its market value might be $1 billion, unicorn territory.

Saturday, October 8, 2016

Newsstand owner adapts to survive media crisis

Newsstand owner Jesus Erro: Publishers are fudging their sales numbers.
PAMPLONA, Spain - Those who study the business of media tend to look at it from the perspective of journalists and publishers. But the owner of a newsstand in the heart of this provincial capital has a different point of view.

Jesus Erro, 56, has owned and operated Caprichos Books and Stationery for the past 24 years. He has seen the good times and the bad.

For the first decade or so, sales of magazines and newspapers -- about three fourths of his business -- were strong. But beginning in 2008, with the combination of the financial crisis and the Internet's impact on sales of print products, the business has gone down steadily.

Versión en español

"For small shops in this industry, it's very difficult to survive. A few years ago, when there was a favorable economic climate, everything was straightforward, more or less. You never expected to make a lot of money but you did expect to make a decent income. But now with everything that has come along -- the Internet, the economic crisis -- Pffff. We are trying to make just enough money to survive in these kinds of shops."

Friday, October 7, 2016

'Take risks, learn from mistakes,' says film-maker

Joffé spoke to several hundred students at the University of Navarra on Thursday.

Film-maker Roland Joffé has a way of leading people on a mystical meditation to find out who they are and how they will communicate with the world.

"The truth is that no one in this room actually knows where we are," he told about 400 students and professors Thursday at the University of Navarra School of Communication. "And if we don't know where we are, how on earth can we know who we are. And finding out who you are is all your journey, isn't it?

"Communication is about finding out who you are and listening to other people and finding out who they are. And that's very beautiful."

Joffé is best known for directing The Mission and The Killing FieldsBut he holds a special interest for the University of Navarra audience because he wrote and directed There Be Dragonsa film about the founder of Opus Dei and the university, St. Josemaría Escrivá de Balaguer. (Our colleague Jaume Aurell was a historical adviser on the film.)

Make choices, take risks

Joffé encouraged students to take risks and learn from their mistakes, "Because that's the only way we learn. We're in a great vortex of communication. When we communicate, or when we create a film or a work of art, we can get it wrong. That's not scary, because we all make mistakes, and getting things wrong is part of the process, and listening to those who tell us we've got it wrong is an act of love."

Sunday, October 2, 2016

How a musician views piracy and streaming



In May I was in New York at an academic conference and had time to spend with my son, Patrick Breiner, a jazz saxophonist.

I wanted to hear what he had to say about the economics of the music business from his perspective. He ended up talking more about relationships than economics.

Patrick says that in the digital world, the connection between the artist and their work is intangible. So the act of downloading the work for free "doesn't feel the same as taking a physical thing from a store or a person."

"When you download content for free, at least in my experience, my relationship to that content is cheapened."

Patrick, 32, says he has downloaded lots of material for free from libraries and other sites, and never listens to it. On the other hand, the music he has bought and literally invested in -- whether from streaming services, CDs, or vinyl albums -- "I listen to all the time."