Saturday, March 20, 2010

Arthur Sulzberger on the Pay Wall

Art Sulzberger, the publisher of The New York Times, told SABEW conference-goers in Phoenix that The Times Select paywall made $10 million in its first year, and he considers it successful. But with digital advertising booming, Sulzberger said they needed to accomodate access to a new crop advertisers.

Sulzberger said the Times' new metered model, where those who use the most, pay the most, will roll out in 2011. "The reason we like the metered model is that it will keep us in the search ecosystem.

By using this blended model, our loyal readers will pay, and we will still have search. We can not lock in any single answer," he said.

He understand that's everyone's watching this metered model. "Our success as company will be judged on how well we do this… that’s why we’re rolling it out in 2011, we need to get it right. Legacy circulation system must integrate with the website."

On Google: "Railing against Google is like railing against oxygen."

On Competition against the WSJ and Rupert Murdoch: The challenge that we face is to challenge our brand promise into the digital era. The challenge that the Wall Street Journal is to change their brand promise while moving into the digital era. This is no small feat.....We're not going to change (in response to Murdoch's broadening of the scope of news at the WSJ) ...we are going to stay with what we're doing."

On the young adult market: We need to understand how information flow is changing, and we need to understand how Facebook is integrating.

On Mexican businessman Carlos Slim: He is influencing our strategy, NOT AT ALL. He's a great investor, he got a good deal.

Amit Singhal on China and mobile search

Amit Singhal, Google fellow, speaking at the SABEW annual conference in Phoenix

He talks about China: "Governments should want information to be free."
How how search change on a mobile device: "We are already thinking about it. If you search for anything on a mobile device, we change our package. Our buttons are bigger, and we give you a map. Interfaces are different...the kind of information people seek on mobile phone is different.... it's far more local oriented."

On keeping secret Google's search and page rank algorithm: "If there is a leak, there are massive attacks on Google."

On paying for content contrary to an open web: "Economics will take over. If people want that content, they will pay for it... It's not contrary to an open web. If users want it, they will pay for it."

On McContent, should Google distinguish between rehashed content and original content: "Can Google algorithms find the difference. There are already things in our algorithm that try to find original content, but algorithms still don't understand language. We are very aware... we try very hard to make sure that such type of content doesn't litter the algorithm results. We do distinguish (in favor of original content). All good providers have high page rank."

Friday, March 19, 2010

SEC's Khuzami live at SABEW in Phoenix

Robert Khuzami, the SEC's director of enforcement, says that his agency is the cop on the beat for the financial service industry. See the video below...

He said that under his tenure, specialization is what makes the difference. Today's sophisticated fraud is complex, and so specialized investigators are "smart in the areas in which they operate."
And he says he does look at business news for tips for areas to investigate. He says tips just don't do it... but specialized investigators can figure out which rock to turn over.
The SEC enforcement will divide into five areas, to be launched in mid April:
  • Asset management, including investment companies and hedge funds
  • Market abuse, including insider trading and other market manipulation, including frontrunning and shortselling. Especially focused on technology.
  • Structured and new products, including derivatives like CDOs. He's very suspicious of new products.
  • Foreign corrupt practices, particularly bribery.
  • Municipal issues, particularly pay to play, and public pension accounting. It's thinly regulated area, and stretched local finances could lead to fraudulent practice.
The SEC is also working with more "cooperative" agreements to flip insiders to inform on their shady employers. He also has changed SEC's management, flattening the administration and making management less top heavy. He's also improved work flow and a new Chief Operating Officer is streamlining process, including creating a centralized office to handle the more than 700,000 tips the SEC gets every year. They are also looking a metrics to look at the use of resources within the agency. Khuzami is also pleased with the quality of new employees in the SEC who have a great deal of expertise.

He says it's also about the cases. "I have a great deal of optimism about the future of the division. The numbers are up across the board." He cited his enforcement action particularly against mortgage lenders like Countrywide for deceptive practices, and New Century for overstating financial statements. Also he cited charges again a hedge fund managers and an investment banker for manipulating prices in the credit default swap market. He's also charged hedge fund managers for pushy shoddy projects, and accounting firm Ernst and Young for fraudulently restating Bally's earnings. He brought several Sarbannes-Oxley violations violations, as well as insider trading violations, including the Galleon Group case, where hedge fund investors lost billions.

Sports CEOs talk about 3-D broadcasts

More live coverage from the SABEW conference in Phoenix....

We're long past HD, and Phoenix areas sports execs Derrick Hall of the Arizona Diamondbacks and Doug Moss of the Phoenix Coyotes talk about 3-D broadcasts of sporting events and what it means for their industry.

2nd session on covering the economy

2nd session, sponsored by NEFE

Getting it wrong – what journalists are missing in coverage of the stimulus and recovery

Panelists talk about journalists and covering the crisis.

Stephen Happel, economist ASU: Biggest scumballs of the earth are in the financial sector It’s not a failure of capitalism but a failure of regulation -- that’s how you can make the invisible hand work….

Kathy Kristof, personal finance columnist: It’s 1982 all over again. The complexity of explaining this as a derivative bores readers. It’s very complex and hard to understand. We need to make these lenders explain the risk models.

John Wasik, personal finance author: It’s more than 1982, it’s 1982 and 1930 combined. There’s $60 trillion in derivatives out there, an amazing amount….. It’s a market that’s not properly regulated.

Ali Malekzadeh: There are blackboxes in our economy that no one writes about. Universities are one of them. Hospitals, health care, insurance companies also – unless you develop yi9ur sources in those companies, who can’t chip away at that.

Government debt:

Ali Malekzadeh: The economy is about $1 trillion smaller than it used to be…that’s what you need to be writing about. Many people wanted a smaller government, but be careful what you wish for…. The state budgets will be smaller. Imagine that will mean.

Kathy Kristof: This level of government debt is not sustainable…. If you think consumer debt caused a crash, wait until you see government debt crash. We’ll have a much bigger problem 10 eyars from now. We’re on the track of becoming Greece. I worry about the next recession.

John Wasik: You’re going to see money cuts in every single state.

What journalism is doing:

Ali Malekzadeh: Talk about the people behind the numbers. Giving a picture of 375,000 laid off; can we give a picture of 3 of them?

Stephen Happel, economist ASU: The financial press really got what drove this crisis, (which is the lack of) financial regulation and greed.

LIVE from SABEW in Phoenix

Kenneth Feinberg says “revenge” motive would cut pay czar’s credibility

This coming week as Wall Street enters proxy season, compensation czar Ken Feinberg will issue his rulings for this year’s compensation packages for companies who received tax bailouts.

In his address to SABEW members Friday at Arizona State University’s Cronkite School of Journalism, Feinberg talked about how he arrives at his decisions for executive pay, as well as the growing anger among Americans toward what is seen as excessive compensation for those who work for troubled firms.

Feinberg, the Treasury Department’s special master stressed the limits of his job. First, he says he now only supervises the pay of the five companies who have not yet repaid their taxpayer bailout funds: AIG, General Motors, GMAC, Chrysler and Chrysler Financial.

He stressed the three main functions of his limited role:

• Control compensation of only the top 25 officials in those five companies.
• Create a compensation structure for employees 26-100.
• In a discretionary function, see to have returned excessive compensation paid to employees before the bailout.

Feinberg acknowledged the growing populist sentiment and outrage in compensation among taxpaying Americans who earned significantly less than those executives high-flying salaries. “The American people own these companies, they are creditors of these companies,” Feinberg said.

In calculating compensation, Feinberg considers the company’s competitive needs, and need for stability in corporate leadership. In addition Feinberg reviews corporate and independent data before setting compensation. Sometimes when companies suggest unreasonable compensation for executives, he reminds them of the American taxpayer anger. “I tell them, ‘there will be pickets at that person’s house,’ and for the most part, we’ve worked it out.”

Feinberg hopes his efforts, albeit in confined to five companies, offer some leverage into influencing the pay for other American companies. “In one sense we are having an impact on Goldman, Wachovia, Morgan Stanley to voluntarily” limit themselves, he said. “It’s a small early sign we’ll have a voluntary impact” on what some Wall Street execs will get in their paychecks.

As for the pay structures to be announced next week, Feinberg hinted that executives shouldn’t receive any more than $500,000 or less in base taxed salary. Feinberg also places limitations on stock grants, requiring that such compensation vest immediately and is not redeemable for two to four years.

Besides limits on salary, Feinberg said the compensation problem at American companies should be address through government regulation and stronger corporate governance. He asked, “Do we have the right people” who are on corporate compensation committees and board, people who are independent and strong enough to “push back” on pay issues.

Though Feinberg has the power to wrest money back from executives who might have been overpaid while their companies were sailing into trouble, he feels that pay that was legally given to executives should not be called back. But, Feinberg explains, past excessive pay could be a consideration for the pay he sets going forward.

Feinberg says the idea that “we’re out to get that person” would cut the credibility of his work as special pay master.

Wednesday, February 3, 2010

It's official -- the web is the place for breaking news

The latest newspaper research from my colleague, Dr. Clyde Bentley:

The news of the moment, the mommy market and the best buys in print -- there really is something out there for us besides Dr. Jobs asking you to take a tablet and the Gray Lady asking you to pay for online access. The new year has unleashed a rash of important newspaper numbers:

Immediate gratification -- Print newspapers probably stopped being the first place people turn to for breaking news back when radio came on the scene, but the Web has sealed the deal. The third annual News Users Survey by the Outsell research firm shows a dramatic increase in the number of people who turn to the Internet for "news right now." Today 57% of news users turn first to the Web and a third prefer using an aggregator like Google or Yahoo. As a result, the report said, newspaper usage continues to slip.

Declining readership is bad news, but no one should be surprise that newspapers are not cherished for immediacy. Unfortunately, the study says little about the online or mobile sites that converged newspaper organizations offer. Nearly 75% of the respondents said they would go to a free site if newspapers started charging for access, but that assumes that the same content will be available free elsewhere. That in turn assumes another organization has the same news-gathering ability. And that feeds into Outsell's findings on what content people want. Respondents go to major Web sites for national topics, but expect local print, broadcast and Web outlets to provide their local news and information.
The stats support the notion that readers see local information as compelling content and that it must be unique to have monetary value. The paid-wall argument rests not so much on the results of surveys like this as on a marketing analysis of what content niche a newspaper can "own."

Mother may I? -- It's easy to be sidetracked by the headlines about survey results. Take the recent reports about All About Mom, a national poll of mothers by BIGresearch for the Retail Advertising and Marketing Association. The most reported number was 60.3% -- the percentage of moms with children at home who use Facebook. The first times newspapers came up in the report was with a measly 6.1%.

Don't panic yet. That little number proportion of moms who read newspapers at the same time they talk on the cell phone. That can be seen as the amount of focused concentration the respondents give newspapers when compared to their multi-tasking with other media. For instance, one in five mothers said they chat on the cell phone while browsing the Web. Newspapers, in fact, more than held their own in the survey. BIGresearch said 78% of mothers polled read a local daily newspaper at least occasionally and 40% read it regularly. Community weeklies scored 62% for occasional reading and 26% for regular reading. All that added up to a weekly reach of newspapers to 54% of moms.

Why should you care? Check the buying decision stats collected by the National Association for Moms in Business: Moms are responsible for 83% of all consumer purchases in the U.S. The $1.6 trillion they spend each year is equal to the total purchasing power of the UK. If you are not reaching mothers with your content, your advertisers are not reaching their customers.

The full report and its statistical tables are worth downloading if for no other reason than to see what time of day moms read the paper (only 16% in the morning) and the long list of leisure activities (read "story ideas") that moms enjoy.

Bargain, not basement -- Although ad revenue from newspapers has slipped, the effectiveness of the medium is holding in some demographics. A new Adweek Poll/Harris survey placed newspapers at the top of the list of media for "advertising most likely to help find bargains." But there was a catch: Papers took the overall lead by rating very highly with consumers 45 and older. Boomers read papers even if their kids don't.

In the January poll of 2,136 people, 23% turned to newspapers for bargains, compared to 18% to online sites, 12% to mail, 11% to TV and 2% to radio. Then there was "none of the above;" 34% said the type of ad makes no difference.

I found it interesting that newspaper ads easily beat television ads in every age and gender bracket. Online advertisement beat everything for 18-44 year-olds and for college graduates, but I wish that Harris and kin would give us numbers for more than just generic "online ads." Of more concern to me is online advertisement in support of editorial content, as on a news site. I continue to wonder whether the minimal revenue newspapers get from their Web editions is a reflection of the ability of the ad format to make cash registers ring.

Daily? -- Adweek Media/Harris also gave newspapers a mixed bag of results in its December reading survey. "Almost every day" reading of what is supposed to be a daily paper is down to 43% overall and to 23% for the 18-34-year-old group. The aggregate percentage was pumped up by the 55+ group, which reads daily 64% of the time.

That said, all statistics are not the same. Online readership and television viewership are often measured by a monthly average. The newspaper apples to those "monthly cumulative" apples compare quite well: 81% of the respondents said they read a paper at least once a month and 72% said they read at least once a week. Even that younger cohort reads a paper 71% monthly and 59% weekly.

The same poll said 70% of adults won't pay a dime for online newspaper content. I'm less inclined, however, to give that question much credence this early. I can't remember ever expressing eagerness to start paying for something I now get free. But I usually ante up when given a bill for something I enjoy.

Only freebies -- Those great apps for smartphones may get the buzz, but they don't always get the cash. Asknet's survey found that 45% of smartphone users have never purchased an app. The vast majority of the rest said they had spent less than $50 on apps. The poll, taken simultaneously of smartphone owners in Boston and San Francisco, also showed the continuing market strength of RIM's Blackberry. In Boston, 53% had Blackberries, 37% had iPhones and 10% had other brands. In San Francisco, that miscellaneous mixture was 41%, but the Blackberry hit 34% and the iPhone tallied 25%.

Both sets of statistics bear pondering by news execs. Income from paid news apps may be limited and it seems obvious that iPhone apps won't cover the whole market.

Suburban power -- Two research reports conducted here by the Reynolds Journalism Institute for Suburban Newspapers of America are now available for free download. The SNA Suburban Market Survey of 2,615 adults is bound to raise the eyebrows of newspaper critics. Suburban newspapers dramatically trounce all other media as the preferred source of community news, local youth sports, local business news, local shopping and local entertainment news in their markets. Asked where they would turn for community news, for instance, 66% of respondents named suburban papers, compared to 22% for the Internet, 20% for metros, 18% for TV and 9% for radio. The study also indicates that free weeklies are better read in the suburbs than metro dailies, 59% to 57%.

Using the same sample, the Community Web Sites Study showed huge growth on the use of the Web to access local news in a week -- up from 49% in 2006 to 66% in late 2009. Not surprisingly, suburbanites like local news and log on to Facebook. But of special interest to me was their use of mobile phones. Six out of 10 smartphone owners accesses news and weather on their handset. But don't be blinded by the glitz of the mobile Web, as 59% also said mobile text alerts will be useful to them.

Speaking of mobile -- My fellowship project at the Reynolds Journalism Institute is to help newspapers cope with the growing tidal wave of mobile media. To that end, I've started a special blog and created an e-mail discussion list - - on which I invite your participation. I'll post regular updates on mobile developments that should impact the news biz and then moderate the discussion.

Two aspects of this project may be of special interest to you. First, I will attend the World Mobile Congress in Barcelona Feb. 15. Consider me your reporter. I will blog back information as fast as I can, but I will also try to bird-dog your questions if you will pass them along.

Closer to home, we at the Reynolds Journalism Institute want to host an initial gathering of "mobile editors" or similar newsroom creatures, tentatively April 19. There is no industry group for mobile editors yet and we know many of you would like to exchange ideas. Send me an email if you are interested so I can get it on the rapidly-filling RJI event calendar.