thoughts on digital

Pandora Predicts Profitability

Pandora is a great product. I hope their prediction comes true.

Information Wants a Sugar Daddy

Peter Kim from Dachis Corp, wrote a nice post about the power of aggregation. The concept isn’t particularly new but the simple mantra, “aggregate or be aggregated”, is a helpful strategic reminder for anyone developing a digital product or strategy. 

I was a little disappointed in his use of the cliche, “information wants to be free.” It’s a catchy phrase but it actually confuses things. People would like information for free. They would also like web services, cars, food, and oil to be free. But that doesn’t mean offering information for free is a good business model. Sometimes it’s better to wall off content or services in exchange for fees. 

If the newspaper industry continues on its path towards insolvency, then quality journalism and information will whither. Yes, some information will continue to flourish but many quality sources of content will need more than advertising to survive.

To use the paradigm of Peter Kim and Jason Calacanis, great information wants a sugar daddy. 

Truth, Lies, And Web Measurement Services

The New York Times recently published an article about different attention measurement companies show wildly different traffic numbers for the same websites.

Take Hulu.com for an example. While Nielsen estimates Hulu.com had 8.9 million visitors in March 2009, comScore reports 42 million.

The author, Brian Stelter, doesn’t tell us what Hulu self reports and it doesn’t compare numbers against other measurement services such as Alexa, Quantcast, or Compete.com.

I suspect that the solution is much simpler than anyone cares to admit.

For example, to build its data, Quantcast distributes short, light-weight analytics tags on their publisher partner websites.

comScore and Nielsen could easily do this. They can still keep their data secure by requiring a password to access it. If a publisher is willing to do it for Quantcast, they will probably be willing to do it for others. The technical process is precisely the same.

But regardless of whether or not the measurement services upgrade their capabilities, the real issue is not so much about campaign measurement but instead bragging rights.

After all, media buyers do not evaluate campaigns based on the total number of visitors to a site. Instead, they look at how many ads were actually served — as measured by their third-party ad servers (e.g. DoubleClick’s DFA, Microsoft’s Atlas, etc).

The only time comScore or Nielsen data really comes into play is when it comes to using their panel data to see if there were brand awareness, preference, or sales lifts. While the validity of these research services is critical, this is a completely different issue and should be discussed separately.

The Economist’s Take on the Newspaper Sector

Interesting take on newspaper business from The Economist. 

I’m not convinced that democracies can prosper without a few well-funded, premium content producers. There’s certainly a lot of unnecessary editorial redundancies (such as sports and film coverage) but I’m not sure that algorithms and the blogosphere are enough to mitigate the loss of professionally-written, edited journalism.

Should Government Bailout Ailing Newspapers?

Silicon Alley Insider posted a very interesting article about Washington state’s 40% tax cut for local newspapers. 

While I certainly appreciate the value of quality newspapers — particularly with respect to investigative journalism — we need to approach the matter with caution.

There’s an inherent conflict-of-interest when the government provides special favors, and can take those favors away, from a business whose primary business is to provide information to citizens.

SAI gives several reasons why providing tax breaks to newspapers are a bad idea. You can decide for yourself if you agree.

But if the public is going to give special favors to keep newspapers afloat, then we also need to think through how to simply and effectively create checks and balances

It’s noteworthy that Thomas Friedman recently recanted $75,000 in speaking fees from a governmental organization. According to the newspaper ethics handbook, journalists are supposed to disclose once-a-year all speaking engagements that paid over $5,000. Those disclosures go to the newspaper’s office — but are not publicly revealed. While I suspect Friedman’s intentions are good — it seems absurd that legal mandates don’t require real-time public disclosure.

As Alan Moore once asked, “Who will watch the Watchmen?”

Regardless of whether or not the government offers tax breaks to newspapers, stronger transparency and checks on potential conflicts-of-interest are critical towards maintaining a healthy democracy.