Haque and Doc on news, evolution, and bucks

Attention to the dire straits of news as insolvent, failing enterprise and what to do about it goes on. Interesting discussions include that of Umair Haque, who suggests that nichepapers may provide a clue to how content can make money in the future. He makes a distinction between news - the commodity that is immediately available everywhere when something "newsworthy" (Michael Jackson dies) happens and knowledge, which is "meaningful" and "lasting."

Doc comments on Haque, offering a tantalizing suggestion about how the new news is larval, how it pixellates via many witnesses and sources, and how this may over time evolve into something rich and strange.

The results paint a mosaic, or perhaps even a pointillist, picture of news sourced, reported, and re-reported by many different people, organizations and means. These are each portraits of an emerging ecosystem within which newspapers must adapt of die.

Where Haque is looking at the hierarchic depth of knowledge as gleaned from informed sources by discerning journalists, Doc is watching the world scan itself, reacting with almost a visceral immanence, seismically, to events. Twitter picks them up and gossip bubbles up.

Somewhere between Doc and Haque may lie some future -- place? medium? manner? -- of instant information channeled and built into useful knowledge.

One thing both writers speak to, but implicitly, I think, is the current complexity of what is now knowable as news. Newspapers can still position themselves as significant cullers of local news and information useful and desired by their local audiences. But no single newspaper can hope to match the scale and complexity of the Internet as a sensorium resonating with the quickening awareness, wit, and free comment, learned or ignorant, moving all around us. Nor can any modality other than the Net contend with the complexity and intricacy of, say, the Federal Government or Organized Crime in all their tentacular scope.

Rather than compete with the Net, newspapers - no, news organizations - will need to adapt and work with it. Haque and Doc are both saying this, but I'm emphasizing the evident difference imposed by scale that makes this not an option, but a new norm. This is why TV studio local news has become nothing more than a joke - its simplicity beggars belief in a networked world of information.

But the other side of this - how to make a profit - is still unclear in Haque and Doc. According to Haque, successful nichepapers like HuffPo are indicators of how money is made:

"What is different about them is that they are finding new paths to growth, and rediscovering the lost art of profitability by awesomeness."

I'm less persuaded that content alone, no matter how stunning or seductive, can establish reliable, viable earnings. Which is why I have been trying to formulate one simple observation -- that we who use the Internet think of the Net as both mechanism and mind - pipes and content. We believe that when we've paid our Internet Service Provider, we've done our share. The stuff we find when we connect is what we have already paid for.

Only, the corporate "owners" of the pipes do not see it this way. They make a clear distinction between pipes and content (and then proceed, if they're Verizon or Comcast, to offer miserable excuses for content), and tell us we are only paying for the pipes.

What strikes me in all the discussions, white papers, and bloggery among journalists and commentators is, they apparently buy this hokum -- hook, line, sinker, and mouse turd. Not once have I seen the savvy content gurus suggest that the money we end users intend for content is all being waylaid, ripped off, by the pipe guys. Somewhere back in the day when the pipes were being laid, there was a logical moment when Big Pipe had to think: "What if no one puts any content out there? Then who will use our infrastructure?"

Fortunately for Big Pipe, no content provider apparently ever raised the issue with them, saying, in effect, "That's a nice pipe you've got there - want some content? Let's make a deal."

That deal has yet to be made. The discussion involving the economics of content seems trapped inside Flatland's notion of content. They extrapolate from antique models of moneymaking and apply them to the future, instead of journalistically analyzing the lie they've all been fed, and all believe, that the Internet can, in the eyes of its paying customers, be divided neatly into monthly infrastructure charges on the one hand, and then, on top of that, an infinity of charges to the same customers for the privilege of reading or seeing anything.

My $.02 is that this entire economic system of the Net has to be revisited. The mega profits generated and hoarded by Verizon, Comcast and their keiretsu buddies needs to be shared with content makers -- not just with news, but with anyone doing worthwhile stuff. This is what I've been trying to speak to in recent posts here, as you'll see if you scroll down.

My proposal (caution: Language!) recommends creating an independent pool of funds generated from the income streams of the ISPs or ILECs -- funds which then can be shared among providers of content via an equitable micropayment system.

I don't mean to imply this is the way it must be. I'm saying that I've yet to see any economics of content - including that of David Simon - that makes better sense by leaving out the economics of the totality, which includes the infrastructure. I'll be happy to be pointed to a better idea.

First time in print

The idea I've been beating to death here has found its way into The Atlantic, only sort of reversed:

Derek Thompson offers "7 Ideas That Could Save Online Journalism" . We pass in silence over #'s 1 through 6. Here's #7, as he formulates it:

7) Make Verizon Pay. Think cable. Last, here's an idea that sounds impossible at the moment, but has ancestors in cable: sharing fees with Internet service providers. Basically content providers would band together in groups -- maybe like Journalism Online -- and lobby broadband internet providers like Comcast and Verizon. I see no indication that something like this is possible in the short term, Pew reports that a company called Clickshare believes it can implement a service in which "consumers have an account at one service (such as a news, cable or Internet service provider site) and can be periodically billed for access to information from a plethora of other affiliated content sites."

One would not imagine that Clickshare would see it quite the way we do:

 ...we who use the Internet think of the Net as both mechanism and mind - pipes and content. We believe that when we've paid our Internet Service Provider, we've done our share. The stuff we find when we connect is what we have already paid for.

Only, the corporate "owners" of the pipes do not see it this way. They make a clear distinction between pipes and content (and then proceed, if they're Verizon or Comcast, to offer miserable excuses for content), and tell us we are only paying for the pipes.

What strikes me in all the discussions, white papers, and bloggery among journalists and commentators is, they apparently buy this hokum -- hook, line, sinker, and mouse turd. Not once have I seen the savvy content gurus suggest that the money we end users intend for content is all being waylaid, ripped off, by the pipe guys. Somewhere back in the day when the pipes were being laid, there was a logical moment when Big Pipe had to think: "What if no one puts any content out there? Then who will use our infrastructure?"

Fortunately for Big Pipe, no content provider apparently ever raised the issue with them, saying, in effect, "That's a nice pipe you've got there - want some content? Let's make a deal." 

At this point, the impending doom facing journalism will require Content and Pipes to rethink the current model of content economics. Or, failing such gumption, Content and Pipes will attempt to throw us, the end users, the folks they are allegedly there "for," under the bus.

If we do find ourselves under the bus, it might be necessary to show Large Content and Fat Pipes that indeed, without a model adequate to the economic realities of human users, they are dreaming the phantasmagoria.

 the expanding frontier in the United States made for an atmosphere of uncertainty and fear that was ideal for phantasmagoria shows^[11].

Big Pipe, small beer

A small footnote to our Big Pipe motif:

Big ISPs usually rely on peered connections to other major ISPs, connections which incur no per-bit cost. As for the cables in the ground, they've been there for years. The equipment back at the headend must be installed once, after which it runs for years. Cable node splits and DOCSIS hardware upgrades are relatively cheap. Requesting one additional bit does not necessarily incur any additional charge to the ISP.

If most Internet costs are fixed (and the National Broadband Plan agrees that they are), and if bandwidth is dirt cheap, what "charges" are heavy Internet users ringing up for ISPs like Time Warner? ...

TWC's revenues from Internet access have soared in the last few years, surging from $2.7 billion in 2006 to $4.5 billion in 2009. Customer numbers have grown, too, from 7.6 million in 2007 to 8.9 million in 2009.

But this growth doesn't translate into higher bandwidth costs for the company; in fact, bandwidth costs have dropped. TWC spent $164 million on data contracts in 2007, but only $132 million in 2009. - Nate Anderson

It is risen, and it eats your brain on stale crackers

Abraham Joshua Heschel often used the word "embarrassment." "The cure of the soul," he wrote, for example, "begins with a sense of embarrassment, embarrassment at our pettiness, prejudices, envy, and conceit; embarrassment at the profanation of life. A world that is full of grandeur has been converted into a carnival." Speaking of Faith.

Heschel, beautiful soul, contemplate Comcast. Here's a tube-and-truck shop that just found 13.75 billion simoleons to buy NBC. Where the fuck does a publicly-held company stash that sort of cash? Don't poverty-stricken shareholders get some of the vig?

Comcast Corp. is said to be serviced by the smartest money men that money can buy. (I recall being reamed (by phone, long distance, from Corporate) by one of their top accountants for failing to follow expense account procedures. I'd been there less than a week, the money in question was no more than $40.)

Perhaps that is why, despite the need to come up with some hard cash, Comcast has also found it in its heart to succour its long-suffering faithful:

Comcast Corp. Increases Dividend 40%; Intends to Complete Current $3.6 Billion Stock Repurchase Plan Within 36 Months

Thursday, 3 Dec 2009 06:18am EST

Comcast Corp. announced that the Company's planned annual dividend has increased 40% to $0.378 per share. In accordance with the increase, the Board of Directors has increased the quarterly dividend payable on January 27, 2010, to shareholders of record as of the close of business on January 6, 2010, from $0.0675 a share on the Company's common stock to $0.0945 a share. Additionally, Comcast announced its intent to complete its $3.6 billion share repurchase authorization over the next 36 months.

I remember the epiphanic, or apophenic, moment when, at 7:30 a.m., employees were summoned to a general meeting at a large auditorium distant from our workplace. Why, Truepenny? To be privileged to be among the first worldwide to behold the new Comcast Corporate Logo. It arrived amid sound, fury, smoke and mirrors + video of the long struggle to find that glyph, that Mark, that amulet which would and could only say, speak, represent, embody, BE, Comcast:

as the Eleatic Stranger would completely understand. Balm in Gilead. Hosannah. He is born/risen/compounded quarterly at 7.5% tax free.

So all "kidding" aside, I have to ask - if Tube ownership is so lucrative that Comcast can afford to own one of the major Big USian Content providers, then what's the problem with my argument that those who own the tubes, Big Pipe et al, ought to be sharing the wealth with the po' folk that every day strive to provide meaningful content on the web, at no cost, with piddly ad contracts, outdated marketing schemes, and human salt?

Why should the tube be worth, basically, infinitely more than what it is there to carry?

Friends who remain at the gnuspaper I used to work at tell me that, after having scraped every possible bit of dollarage from them, Management (still owned by the New York Times) has notified them that they not only won't receive bonuses for doing more work with fewer people than ever before, but they'll also be forfeiting the 5 vacation days they received last year in lieu of a salary increase, because it was tough to find enough living bodies when people actually took their daze off.

Abraham, Abraham, I say to you: Until the Contentasters rise up and demand a sou or two from the Tubers, there will be no joy in Mudville; the model cannot hold. The forces that want Murdoch and Comcast to control Content believe we know no better than to want to be held in contempt, controlled by corporate Virii that will do our thinking for us, and be well compensated for their pains. After all, they've got the business model now haven't they? How embarrassing.

Ad hominous signs

Upon hearing that Comcast is once again raising its rates, even as it moves from monopoly of pipes to ownership of content (NBC):

If we are serious as a nation – both public and private sectors – about connecting America;

about leading the world technologically and economically; about ensuring that all Americans have

meaningful access to on-line education, healthcare, and information essential to citizenry, then we

should be very concerned about these ominous signs. Mignon Clyburn, FCC Commish.

freepress:

Brian Roberts.

This is the same guy who recently made the list of the top five “highest-paid, worst-performing” CEOs in the country. That's no exaggeration. Do you know what Roberts makes in a year? $40.8 million. That's more than $100,000 a day . . .

Earlier this week, Comcast announced that it will again raise its rates for Internet access. The company already records a profit margin of 80 percent for this service, charging customers $40 for something that costs just $8 to supply.


==


See: It is risen, and it eats your brain on stale crackers. Also: Big Pipe, passim

Cognitive blindness

Eyeless in Gaza at the Mill with slaves Dept.: The more I look at it, the more it seems that the reason most USians do not have a problem with a patently schizoid internet economy (all $$ to Big Pipe, $0.00 to Content) is that they don't see it. Things that serve merely a use value function are green-screened out in the USian Capitalist, branded, techno-social economic delusion. If it ain't a snazzy business model complete with huge brand and tits, it n'existe pas.

Business Model

Right to Pipes

Regarding the Big Pipe issue:

the United States is the only industrialized nation without a national policy to promotehigh-speed broadband #

Go Finlandia!

See as well: Berkman Broadband Study, which finds the US to be "a middle-of-the-pack performer" (p. 10).

Trinitarian billability

Brilliant comment by Dean Landsman responding to Doc:

There is no real “Triple Play.” Rather, there is one connectivity instance (hooking up premises) for which users are given three different recurring billable events. A recurring monthly charge makes sense - after all, they do provide this service. How they bill for it, however, is another issue.

When a cable or a fiber service offers TV (aka video from existing networks or channels, formerly known as “TV”), also offers voice (formerly known as phone service), and also offers internet connectivity, these are all merely billable events, all of which come from that original connection of pipe to premises.

The TV service breaks down into subsets of billable events, such as VOD, premium channels, and so on.

The phone service offers premium billing for certain “long distance” events, many of which are running on the net and are actually less expensive than the old paradigm of copper and undersea cable.

The internet is simply basic connectivity, allowing users to join a network of other users enjoying a connection to the backbone. The upsell here is gigs of use (up or down).

Bottom line: the costs to the companies of providing these services are nowhere near as high as the upsells and events would indicate. But until competitive offerings are allowed to flourish (and IMHO we can hope but should not set our expectation levels too very high, vis-a-vis the incoming administration), the small group of Big Cos controlling this environment will do all they can to control our connectivity, our access, and their ability to charge us for it on a premium and multiple level and event basis.