The reason for the change is that articles are no longer written only for the newspaper. Breaking news is posted immediately on the Globe’s websites; stories are then fleshed out, posted again, then put into the process for the next day’s paper and the next day’s web entries. With all that traffic, a reliance on “yesterday,” “today,” and “tomorrow” is an invitation for error.

– Charles Mansbach, Page 1 editor of the Boston Globe, on why the paper will no longer use the words in stories

The Washington Post reported this morning that its online ad revenue dropped 7 percent in the first three months of 2012. That follows a New York Times earnings release which saw that publisher’s Web ad business drop 2 percent.

(We should get some color on the Wall Street Journal and Dow Jones, when parent company News Corp. reports its earnings next week; News Corp. also owns this Web site.)

The Times said that digital sales were “under pressure” in the first quarter of the year, while the Post didn’t bother to add any color to its results. But it did note that online display ads were down 11 percent, while classifieds were down 1 percent.

Unlike the Times, the Post is essentially a regional newspaper, so it is harder to argue that its travails reflect a larger trend. And it’s also worth noting that the Post faces fierce competition for its core political coverage from Politico, an online/offline competitor that basically sprouted overnight.

But for the record: The rest of the Web publishing business — including not only Google but laggards like Yahoo — has been posting Q1 revenue increases.  [An earlier version of this post incorrectly reported that AOL's ad revenues were up for Q1; the company won't post its numbers until next week.]

Who in their right mind would lie to Ira Glass?

That was my first reaction to the revelation that the theatrical monologuist Mike Daisey had lied or fabricated — or in his words, “taken dramatic license” with — certain parts of his stage play, “The Agony and the Ecstasy of Steve Jobs.”

When I met people at parties in recent weeks and told them that I write about technology and that I had devoted more than a decade to covering Apple, the first question I used to get was: “Did you know Steve Jobs?” Since about January of this year, that first question has become, “What do you think of Mike Daisey?”

I haven’t had a real answer. I hadn’t seen his show, which was favorably reviewed by the New York Times, nor had I heard the episode of the highly respected public radio documentary program “This American Life” titled “Mr. Daisey and the Apple Factory,” that had been adapted from his play.

The show — or shows — hit a cultural nerve at a critical moment. Apple is the biggest company in the world, sporting a market capitalization of $546 billion as of Friday, with $100 billion worth of cash and investments on its balance sheet and the most popular stable of consumer electronics products in the world, especially the iPhone and the iPad. All of them are manufactured by workers in China, who labor for wages that are low by Western standards, put in hours that by Western reckoning are long, under conditions that to Western eyes aren’t ideal, doing jobs that by any standard are incredibly tedious.

Daisey’s stage show, which became a sensation among New York’s chattering classes, sought to draw attention to the plight of allegedly oppressed workers at Foxconn, Apple’s manufacturing partner in China. As New York Times reviewer Charles Isherwood put it, the play “is a mind-clouding, eye-opening exploration of the moral choices we unknowingly or unthinkingly make when we purchase nifty little gadgets like the iPhone.”

The stage show had been adapted for radio on public radio’s “This American Life,” which is probably the most-respected radio documentary program in the history of broadcasting. And the Daisey episode was presented as documentary, meaning the radio show’s staff of journalists and producers were vouching for it being true.

The problem: Much of it wasn’t.

In the show, Daisey described a trip to China, as well as a visit to Foxconn’s outer gates and other manufacturing companies in Shenzen, where many are located. He delivers a detailed and emotionally riveting account of meeting girls as young as 12, 13 and 14 years old who claimed to work for Foxconn. This would be in violation both of local laws and of Apple policies.

He also told of meeting workers poisoned by a chemical called n-Hexane, used to polish screens.

And, perhaps most movingly, he related a tear-jerking scene in which he showed a working iPad to a man who said he had crippled a hand while making its parts in a Foxconn metal press, yet had never so much as seen one of the devices powered on. Seeing the iPad’s screen in action, he tells Daisey, “is like a kind of magic.”

The word “magic” fits oddly here, because these meetings didn’t happen as Daisey said. “This American Life” yesterday aired a lengthy episode entitled “Retraction,” documenting Daisey’s many liberties with the facts.

To help do so, a reporter for another public radio show — Rob Schmitz of “Marketplace” — did what no one else in the media seemed to be willing to do, which was subject Daisey’s claims to scrutiny. Most damning of all in Schmitz’s report was the testimony of Daisey’s translator, called Cathy. She was found — after Daisey had told TAL he had lost contact with her — and disputed many of the anecdotes taken from the play and used in the radio segment about Foxconn.

Among the fabrications: Daisey didn’t speak to quite as many people nor visit nearly as many plants as he said he did. She disputed finding underage workers. The n-Hexane poisoning incident occurred not at Foxconn in Shenzen where Daisey visited, but at a Wintek facility in Suzchou, more than 900 miles to the north of Shenzen.

The stage show, and therefore the radio show that was derived from it, turned out to be a mixture of facts and fiction. Which might be fine for a production on the New York theatrical stage, where fiction and fact blend readily. And, while it might be okay in entertainment products, you don’t expect it from a prestigious radio documentary program.

And that is where the problems began.

When Daisey’s monologue was adapted for “This American Life,” outrage began to grow among people who wanted to do something about it. It was, Glass says, the most downloaded episode of “TAL” ever, and public radio listeners did what public radio listeners tend to do. For one thing, they started a petition. More than a quarter of a million people have signed a petition at Change.org, inspired by the TAL production based on Daisey’s work, demanding that Apple make changes.

That includes crafting a “worker protection strategy” for new products released, as well as publishing data from Fair Labor Association audits.

Feeding the frenzy, Daisey stepped up as the leading voice for worker rights in China’s electronics industry. He was seemingly everywhere in the media. Since the TAL segment aired in January, Daisey has been seen on “CBS News Sunday Morning,” in a report that, like the “TAL” episode, is now going to have to be retracted or at the very least walked back.

Another CBS-owned property, CNET, hosted Daisey as part of “Reporters Roundtable,” alongside Charles Duhigg of the New York Times, co-author of a series of front page stories in that newspaper. Duhigg ended his “Roundtable” appearance by urging people who care about the issue to go and see Daisey’s play.

Daisey also appeared on MSNBC repeating the same anecdotes and tarnishing the usually shiny Apple. And on HBO. And PBS. And C-SPAN.

Needless to say, there will have to be many more retractions in the days ahead.

At this point, it’s hard to determine what’s more outrageous, Daisey’s lies to Ira Glass and his team, or the national media’s willingness to give Daisey a platform to repeat the same lies and fabrications without making the slightest effort to vet them.

The circumstances around Apple’s manufacturing arrangements in China aren’t new. As a columnist for Businessweek I wrote about Apple’s first round of “sweatshop” allegations in 2006, well before the age of the iPhone and the iPad, which had at the time first come to light in part because of the reporting by London’s Daily Mail.

I’ve never been to China. Many people know more about the on-the-ground facts concerning Apple’s factories than I do. But there are many reporters who have been there. In 2010, Bloomberg Businessweek’s Fredrik Balfour wrote a powerful cover story for that magazine, which aimed to get to the bottom of the string of suicides that occurred among Foxconn employees that year.

ABC’s “Nightline” visited Foxconn earlier this year. Its report was criticized in some circles, because at the time of his death, Apple’s late CEO Steve Jobs happened to be the largest shareholder of that network’s parent company, Disney. Also, ABC had been invited by Apple and Foxconn. Even so, “Nightline” anchor Bill Weir, seeing conditions very different from what Daisey described in the course of his reporting, wondered if Mike Daisey’s work was questionable.

At the very least, Daisey is a dramatist who now admits he chose to lie, but for reasons known only to himself. The chance to raise his profile and sell more tickets to his monologue are obvious potential motivations. Whatever it was, his dramatic product is meant to be consumed as thought-provoking entertainment, not as fact-based journalism, which many people assumed it was.

This is the crux of Daisey’s defense for lying to Ira Glass and his fact-checker: That he’s not a journalist and took dramatic license with the events, and now regrets doing the “This American Life” segment.

And that’s the real shame here.

Clearly, people care about how workers who make our electronics are treated, or there wouldn’t have been a market for Daisey’s show, or for an hour-long radio documentary adapting it. And the subject is one we need to discuss at length as a society. The net result of Mike Daisey’s efforts to put self-promotion ahead of the facts has badly muddied the waters, and has probably done more harm to the people he sought to help.

So, instead of illumination on a serious topic, we are left with little. Mike Daisey is an opportunistic fabulist and should be ashamed of himself for lying. Ira Glass and his team are ashamed for giving him wider attention, and have said so. But there are many more people who should be even more ashamed for taking Daisey’s lies at face value. There should be many more retractions and apologies in the days ahead.

But now we have to start the conversation about Apple and Foxconn and workers’ rights all over again, this time with real, verifiable facts at our command. Is that so much to ask?

(Image courtesy of Mike Daisey’s Web site.)

The numbers of readers signing up so far suggest that at many papers, “paywalls” aren’t about to reverse publishers’ deteriorating finances. Yet the results aren’t discouraging industry executives, who say their efforts are succeeding in shoring up the core print business after years of declines.

Read the rest of this post on the original site »

But maybe not. Michael Crichton, for instance, had insisted in 1993 that “what we now understand as the mass media will be gone within ten years. Vanished, without a trace.” Crichton, of course, wrote “Jurassic Park,” so we must defer to him on dinosaur expertise. But he was far wide of the mark on the extinction of mass media, so perhaps his vision about newspapers in particular was also flawed.

A hint of where Crichton’s vision went wrong can likely be found in the same speech, where he said this:

“More and more, people understand that they pay for information. Online databases charge by the minute. As the link between payment and information becomes more explicit, consumers will naturally want better information. They’ll demand it, and they’ll be willing to pay for it. There is going to be — I would argue there already is — a market for extremely high-quality information. …”

But that’s not what happened, at least outside of trade publishing (industry newspapers, magazines, and newsletters). The closed online services of the 1980s (CompuServe had started its service in 1979) and early 1990s, with their usage fees, gave way in the mid and late 1990s to the open Web. Prodigy, which already in 1991 boasted a million members, was sold at a billion-dollar loss in May 1996, just 18 months after the release of the test version of the Netscape Navigator browser.

And notions of what consumers would pay for — and what they should even be asked to pay for — were turned on their heads. By early 1996 the media theorist (and former Grateful Dead lyricist) John Perry Barlow was writing in Wired that the optimal price for information in many cases was … free. “Most soft goods,” Barlow declared, “increase in value as they become more common. Familiarity is an important asset in the world of information. It may often be true that the best way to raise demand for your product is to give it away.”

And that is precisely what newspaper publishers and others fairly quickly sought to do.

The rest of this e-essay is available on iTunes.

Richard Tofel is general manager of ProPublica, the Pulitzer Prize-winning nonprofit investigative journalism newsroom. At ProPublica, he has responsibility for all of its non-journalism operations, including communications, legal, development, finance and budgeting, and human resources. He was formerly the assistant publisher of The Wall Street Journal and, earlier, an assistant managing editor of the paper; vice president, corporate communications for Dow Jones & Company; and an assistant general counsel of Dow Jones.

The New York-based start-up has been at this in various incarnations since 2009, but CEO Shafqat Islam says he’s getting some traction, and is able to charge Web publishers $3,000 to $5,000 a month per “vertical” for access to his (borrowed) content. He says he’ll do $1 million in revenue this year; last month, Islam raised a $4 million Series A round led by First Mark, along with Lerer Ventures, AOL Ventures and Shari Redstone’s Advancit Capital.

Content syndicators aren’t a new idea, by any means, and NewsCred’s basic pitch sounds quite similar to Mochilla, which has raised a pile of money. Several folks are trying versions of this in video, including AOL’s 5min and U.K.-based Perform Group’s ePlayer. And Demand Media has tried putting its super-low-cost freelancers to work for publishers including USA Today.

NewsCred’s basic pitch seems to be that it has a better selection of blue-chip content makers, all of which are getting guaranteed payments for their stuff. Islam pitches his product as a disruptor out to take on the likes of the Associated Press, but he also syndicates content from Reuters and Bloomberg, also giant newswires. So presumably they don’t feel threatened quite yet.

Here’s an interview I conducted with Islam earlier this week, featuring a cameo from Pat the Contractor (NewsCred is in the process of moving into its own place, after graduating from start-up launcher General Assembly).

(Side note: To get a sense of how difficult it is to hammer out some of these content deals, or just get a foot in the door, see this email exchange between Islam and an executive at Dow Jones, which, like this Web site, is owned by News Corp.)

]]> http://allthingsd.com/20111130/newscred-raises-4-million-for-its-web-based-newswire/feed/ 0 http://allthingsd.com/20111109/whaleshark-catches-150-million-round-to-invest-in-couponing-craze/ http://allthingsd.com/20111109/whaleshark-catches-150-million-round-to-invest-in-couponing-craze/#comments Thu, 10 Nov 2011 05:00:41 +0000 Tricia Duryee http://allthingsd.com/?p=142624 WhaleShark Media has raised $150 million in venture capital to continue buying up coupon-oriented sites around the globe.

The shell company has grown through acquisition, picking up eight sites in the past two years, including RetailMeNot.com and Deals.com in the U.S., and VoucherCodes.co.uk in the U.K. In all, the company claims to attract 100 million unique visitors a year, most of whom are seeking discounts on anything from a gallon of milk to a pair of shoes.

This year, WhaleShark expects to be profitable on revenues exceeding $70 million.

The company’s CEO, Cotter Cunningham, told AllThingsD in an interview that the company is a classic roll-up. Its first $150 million in capital was spent on acquisitions, and that’s how it intends to spend its next $150 million.

Investors in the round include J.P. Morgan Asset Management and Institutional Venture Partners. Existing investors include Austin Ventures, Norwest Venture Partners, Adams Street Partners and Google Ventures.

To date, the company has raised nearly $300 million in two rounds.

“We are actively pursuing a number of acquisitions, and it will take us another year to spend the money,” Cunningham said.

The coupon-clipping business, while ancient, has gotten its sexy back in recent months, thanks to the success of Groupon and the consumer’s general shift in thinking to look for deals online rather than in the Sunday newspaper. VCs have recognized this behavior change and have gravitated to it like a teenager to Justin Bieber.

CouponCabin.com of Whiting, Ind., raised $54 million, Coupons.com secured $230 million in two megarounds, and CouponTrade.com has secured a more modest $2.4 million in capital. I’m sure there are many more that I’m forgetting.

Cunningham says a number of things are driving the trend, and while Groupon’s popularity has helped, WhaleShark is not a daily deals site.

“Groupon went out and created a whole new market with a big sales force,” he said. “They’ve done an amazing job of creating a new market focused on an interesting aspect of the coupon that didn’t exist two or three years ago. Our focus is more on taking the existing couponing model and moving it online.”

Essentially, it’s the newspaper circular that WhaleShark is going after. ”I’m a huge fan of newspapers, but yes, ultimately that’s what we are doing,” Cunningham ’fessed up.

Today, it has aggregated about half a million coupons, from 130,000 merchants, on its site. Many of them are uploaded by consumers, who received a free shipping code in an email from the Gap or Old Navy. Customers have self-reported to WhaleShark that they save about $20 on average per transaction.

The business won’t require even half the sales staff of Groupon. Today, WhaleShark has about 100 people at its Austin headquarters, and 40 people in the U.K. Cunningham anticipates adding 50 to 75 employees in Austin, and doubling numbers abroad.

The company earns a commission from about 10 percent of the offers it distributes on the site. Additionally, it hopes to support the sites through advertising as it attracts a large audience.

[Photo credit: sdc2027.]

]]> http://allthingsd.com/20111109/whaleshark-catches-150-million-round-to-invest-in-couponing-craze/feed/ 0 http://allthingsd.com/20111021/news-corp-chief-faces-angry-investors/ http://allthingsd.com/20111021/news-corp-chief-faces-angry-investors/#comments Fri, 21 Oct 2011 19:23:50 +0000 Martin Peers and Andrew Morse http://allthingsd.com/?p=135724 Rupert Murdoch, chairman and chief executive of News Corp., on Friday faced shareholders for the first time since a phone-hacking scandal at its UK newspaper unit embroiled the company and heightened criticism of what some see as a lack of independent oversight.

Mr. Murdoch, speaking at the annual shareholders meeting in Los Angeles, said the current board and management “will stop at nothing to get to the bottom of this and put it right.” He said the unit at the center of the scandal represents a small piece of an otherwise healthy company that is outperforming its peers.

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]]> http://allthingsd.com/20111021/news-corp-chief-faces-angry-investors/feed/ 0 http://allthingsd.com/20111020/new-york-times-posts-profit/ http://allthingsd.com/20111020/new-york-times-posts-profit/#comments Thu, 20 Oct 2011 20:32:10 +0000 Russell Adams http://allthingsd.com/?p=135106 Cost-cutting helped New York Times Co. swing to a better-than-expected third-quarter profit from a year-earlier loss, despite a deteriorating market for print advertising.

Times Co. said total advertising revenue at its newspapers, which include the New York Times and Boston Globe, fell 7.3 percent in the latest quarter from a year earlier due to a double-digit rate of decline in print. That compared with a 2.5 percent drop in total advertising in the second quarter.

Digital ad revenue at Times Co.’s newspaper properties increased 6.2 percent to $50.3 million in the third quarter. However, overall ad revenue at the papers was dragged down by a 10.4 percent decline in revenue from more costly print ads.

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]]> http://allthingsd.com/20111020/new-york-times-posts-profit/feed/ 0 http://allthingsd.com/20111013/new-york-times-offers-buyouts/ http://allthingsd.com/20111013/new-york-times-offers-buyouts/#comments Thu, 13 Oct 2011 18:51:24 +0000 Joan E. Solsman http://allthingsd.com/?p=132007 New York Times Co. offered voluntary buyouts to “fewer than 20″ people in its flagship paper’s newsroom, according to an internal memo, while stressing that no layoffs were imminent.

In a Thursday memo to staff, the executive editor of The New York Times, Jill Abramson, and others said that “no matter how many people do or do not raise their hands,” no one in the newsroom would be laid off as a result of the buyout program. The memo also said the Times reserves “the right to turn down some volunteers who are in those areas of the newsroom where we feel we cannot reduce our numbers.”

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]]> http://allthingsd.com/20111013/new-york-times-offers-buyouts/feed/ 0 http://allthingsd.com/20110915/viral-video-gimme-that-old-timey-journalism/ http://allthingsd.com/20110915/viral-video-gimme-that-old-timey-journalism/#comments Thu, 15 Sep 2011 07:19:52 +0000 Kara Swisher http://allthingsd.com/?p=121049

Here is a very funny piece from cable television comedy show, “The Colbert Report,” about a reporter from Georgia.

It’s hard to explain why it’s so funny, but it is a perfect send-up of the reporting process. The story: “Man Says It’s Too Hot to Fish.”

As Colbert intones: “Newspapers are part of America’s past, like buggy-whip makers and the middle class, but they still perform an important function.”

Enjoy:

The Colbert Report	Mon – Thurs 11:30pm / 10:30c
Stephen Reports on an Old-Fashioned Hero
www.colbertnation.com
Colbert Report Full Episodes Political Humor & Satire Blog Video Archive

]]> http://allthingsd.com/20110915/viral-video-gimme-that-old-timey-journalism/feed/ 0 http://allthingsd.com/20110907/hey-guess-what-happens-to-advertising-if-the-economy-tanks/ http://allthingsd.com/20110907/hey-guess-what-happens-to-advertising-if-the-economy-tanks/#comments Wed, 07 Sep 2011 11:30:52 +0000 Peter Kafka http://allthingsd.com/?p=117906 Here’s some unpleasant deja vu: Summer’s over, the economy is wobbling and analysts are starting to hack away at advertising forecasts.

2011 isn’t 2008, yet. So Barclays analyst Anthony DiClemente doesn’t think the ad business is going to get hammered — he just thinks it’s going to grow less. The exception here is very old print media, like magazines, newspapers and direct mail, in part because of pressure from daily-deal guys like Groupon and Living Social.

Note that Time Warner has already said it has seen weakness at Time Inc. during Q3, and I’ve heard the same from other publishers, as well.

And as with the last go-round, DiClemente (and others) argue that Web advertising will fare best if we really do go into a double dip.

It’s the same argument, too: Ad dollars still haven’t completely followed consumers into the Web, so there’s plenty of growth left, especially when it comes to video, etc. And Web advertising is more efficient than offline, so in a cash crunch, advertisers will have more incentive to use it, etc.

Which may all be true (I hope it is, given where you’re reading this). But also note that both AOL and Yahoo have made noises about softness in display ads this summer. Then again, both of those companies have plenty of their own problems.

]]> http://allthingsd.com/20110907/hey-guess-what-happens-to-advertising-if-the-economy-tanks/feed/ 0 http://allthingsd.com/20110812/qotd-no-good-news-for-newspapers/ http://allthingsd.com/20110812/qotd-no-good-news-for-newspapers/#comments Fri, 12 Aug 2011 12:29:56 +0000 Peter Kafka http://allthingsd.com/?p=109321

Maybe, we’ll dodge a second recession in the short-term, but the game is the game, and publishers are simply running out of good choices. They’ve been dealt a deck of wild cards, misplayed a few hands and now have fewer chips left to play.

Analyst/author Ken Doctor with a grim prognosis for the newspaper business, which isn’t in any shape to weather a new macroeconomic collapse. Unpleasant factoid of the day: Industry ad revenue has been down for the past 22 quarters.

]]> http://allthingsd.com/20110812/qotd-no-good-news-for-newspapers/feed/ 0 http://allthingsd.com/20110715/rupert-murdoch-tells-the-u-k-we-are-sorry/ http://allthingsd.com/20110715/rupert-murdoch-tells-the-u-k-we-are-sorry/#comments Fri, 15 Jul 2011 15:04:55 +0000 Peter Kafka http://allthingsd.com/?p=98663 News Corp.’s newest tactic in the PhoneGate scandal: Public apologies.

This morning, News International head Rebekah Brooks apologized for her role in the mess and resigned. Now News Corp. CEO Rupert Murdoch is apologizing to the general public via print ads signed in his name. Here’s the full text of the ad, via Sky News producer Tim Gatt, and Gatt’s photo of one of the ads. Note that Murdoch’s apology only deals with his now-shuttered News of the World tabloid, and doesn’t address allegations of wrongdoing at other News Corp.-owned papers. (News Corp. owns this Web site.)

The News of the World was in the business of holding others to account.
It failed when it came to itself.
We are sorry for the serious wrongdoing that occurred.
We are deeply sorry for the hurt suffered by the individuals affected.
We regret not acting faster to sort things out.
I realise that simply apologising is not enough.
Our business was founded on the idea that a free and open press should be
a positive force in society. We need to live up to this.
In the coming days, as we take further concrete steps to resolve these issues
and make amends for the damage they have caused, you will hear more from us.

]]> http://allthingsd.com/20110715/rupert-murdoch-tells-the-u-k-we-are-sorry/feed/ 0 http://allthingsd.com/20110715/news-corp-executive-rebekah-brooks-finally-resigns/ http://allthingsd.com/20110715/news-corp-executive-rebekah-brooks-finally-resigns/#comments Fri, 15 Jul 2011 11:43:21 +0000 Peter Kafka http://allthingsd.com/?p=98560 Rebekah Brooks, the embattled head of the News Corp. unit at the center of the PhoneGate scandal, has resigned. Her departure has been expected for a couple weeks, despite News Corp. CEO Rupert Murdoch’s repeated declarations of support. In other PhoneGate news, Murdoch told The Wall Street Journal that his company had made “minor mistakes,” but that reports that he might sell or spin off his newspapers are “pure rubbish.” News Corp. owns this Web site.

]]> http://allthingsd.com/20110715/news-corp-executive-rebekah-brooks-finally-resigns/feed/ 0 http://allthingsd.com/20110712/rupert-murdoch-gives-jon-stewart-seven-minutes-of-material-video/ http://allthingsd.com/20110712/rupert-murdoch-gives-jon-stewart-seven-minutes-of-material-video/#comments Tue, 12 Jul 2011 10:30:03 +0000 Peter Kafka http://allthingsd.com/?p=96819 Tough times these days at News Corp. (which, as we always need to point out, owns this Web site). Still, an upside: The phonegate scandal provides Jon Stewart with a big, fat, juicy target.

And what’s particularly great/terrible about this clip from last night’s “The Daily Show” is that Stewart and correspondent John Oliver don’t need to do much more than simply recite the main points of the PhoneGate scandal to date. The facts are awful/funny enough on their own.

]]> http://allthingsd.com/20110712/rupert-murdoch-gives-jon-stewart-seven-minutes-of-material-video/feed/ 0 http://allthingsd.com/20110609/coupons-com-raises-200-million-to-save-consumers-a-lot-of-cash/ http://allthingsd.com/20110609/coupons-com-raises-200-million-to-save-consumers-a-lot-of-cash/#comments Thu, 09 Jun 2011 17:06:58 +0000 Tricia Duryee http://allthingsd.com/?p=84925 Coupons.com, the Mountain View, Calif.-based company that is trying to bring a very offline business to the Internet, has raised $200 million in capital.

Half of the funding will be used to buy stock from employees and early investors.

The other half will be used to fuel the company’s growth as the industry shifts from a newspaper-dominated world to an online world, where people search for coupons and print them out, or potentially save them to a loyalty card or mobile phone that gets swiped at checkout. Participants in this and previous fundings were not disclosed.

In an interview with CEO Steven Boal in February, he told me that he had his doubts along the way about whether the industry could change, but “lo and behold, it’s actually happening,” he said.

In the press release today, Boal said it is the perfect time to invest heavily as newspaper readership continues to decline and more consumers are looking online for savings.

Not only does he see an opportunity in bringing coupons online, but he also has two additional goals: expanding the audience of people interested in receiving discounts beyond the industry’s die-hard set of older women and attracting new merchants by bringing down the costs of distributing coupons.

Other ways it will use the cash:

• Hire aggressively by adding 100 more employees to today’s headcount of 300.
• Expanding internationally. The company already operates in 12 European countries through its 50 percent ownership of U.K.-based Couponstar.
• Complete acquisitions. Previous acquisitions include Free State Labs, the developers of Grocery iQ, a leading shopping list application for mobile phones.

]]> http://allthingsd.com/20110609/coupons-com-raises-200-million-to-save-consumers-a-lot-of-cash/feed/ 0 http://allthingsd.com/20110516/many-formats-one-price/ http://allthingsd.com/20110516/many-formats-one-price/#comments Mon, 16 May 2011 07:00:18 +0000 Russell Adams http://voices.allthingsd.com/?p=41093 Magazine and newspaper publishers are reorienting themselves around a business model that has taken hold in other media: the bundle.

The result is a new ecosystem of pricing that turns aspects of the old model upside down. For many years, publications charged for print and gave away their digital content free.

Increasingly, publishers are charging premium prices for digital content, betting on a new breed of media consumer willing to pay for content on devices such as Apple Inc.’s iPad, and throwing in print at little or no additional cost.

Last week, for example, the New Yorker introduced a subscription that includes the magazine online and on the iPad for about $60 a year. For just $1 more a month, subscribers can get the magazine in print, too.

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]]> http://allthingsd.com/20110516/many-formats-one-price/feed/ 0 http://allthingsd.com/20110502/a-day-in-the-life-of-a-sales-person-on-the-front-lines-of-the-group-buying-frenzy/ http://allthingsd.com/20110502/a-day-in-the-life-of-a-sales-person-on-the-front-lines-of-the-group-buying-frenzy/#comments Mon, 02 May 2011 10:30:53 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=4335 Groupon and LivingSocial have ballooned into major corporations over the past year, hiring thousands of local salespeople who try to convince local merchants into participating in the latest fad: group buying.

While other sales positions have been hit hard by the recession, ranging from newspaper reps to real estate agents, it turns out not every one is losing out.

Fueled by hundreds of millions in capital and real revenues, the daily deal phenomenon is creating thousands of new sales opportunities–and the competition is heating up for trained workers with the contacts and experience.

Founded in 2007, LivingSocial has 1,350 total employees and Groupon, which has only been around since 2008, has more than 7,000. That’s not including all of the copycats, which also must hire local representatives in order to be live in a particular market. National providers are also flooding into the space, including well-established companies like Google, Facebook and Yelp.

But these aren’t the stereotypical door-to-door salesmen with briefcases full of samples. They carry iPads loaded with flashy presentations and are pitching something entirely new.

They are trying to sell local restaurants, spas, and yoga studios on the idea that in exchange for offering a steep discount, new customers will walk in their doors.

The frothy local sales market has been noticeable for Jessie Burrough and Harry Jigamian.

Burrough joined LivingSocial more than a year ago, becoming the company’s 24th employee after working as a commercial real estate broker for years. She is now responsible for some of the trendiest and most-trafficked neighborhoods in Seattle.

“It’s super fun, and it’s exciting when you believe in what you are selling. I remember thinking, this is a no-brainer, and that it is so easy to sell. I loved the idea,” she said.

For Jigamian, the decision was also easy, though he’d never heard of LivingSocial before they approached him.

He was a newspaper sales rep for the online-only Seattle Post-Intelligencer. He now oversees LivingSocial’s local sales office as general manager. “I did not know what LivingSocial was, but I knew that online was where everything was going. Now the only two questions are, ‘Where does it go from here, and how high does it go?’ It was all too much to say no to.”

If you aren’t familiar, companies like LivingSocial and its larger competitor, Groupon, offer a voucher for a steep discount, usually amounting to 50 percent off. Customers pay upfront for the coupon. Half of that revenue goes to LivingSocial, and the other half goes to the advertiser, who will end up making 25 percent on the overall transaction.

Normally, deals aren’t valid until a certain number are sold, sort of like buying bulk at Costco. That’s where the “group-buying” term comes from.

While it’s a large chunk to swallow, the daily deal companies want merchants to look at it as akin to placing an ad in the newspaper–except instead of hoping people see the ad and come into your establishment, you will know exactly how many people paid for one and how many redeem it.

Mostly, the focus has been on local commerce; increasingly, it’s expanding into national brands and advertisers, opening the door to nationally-focused sales people as well. (In a separate post today, I wrote about LivingSocial’s latest nationwide promotion on flowers for FTD.com after its prior offer on Groupon failed.)

Mitch Spolan, SVP National Sales for LivingSocial, said he decided to leave his job at Yahoo and join LivingSocial because, with group buying, “there’s no modeling and no guessing. You know when someone buys a voucher that they are fundamentally buying a ticket to come in and see that store.” As Spolan helps to build out LivingSocial’s national sales team, he says the concept makes it easy to recruit. “The sales people understand that. There’s such a desire to be in this space.”

Still, closing a sale can be difficult on the national or local level.

Some merchants have been burned after selling thousands of vouchers, and then losing money on every customer who walks in the door. For a small retailer with low margins, it can run them out of business.

Here’s a look at a day in the life of Burrough and Jigamian as they make two sales calls, and a video in which they explain how they got into the business.

The first stop was at a restaurant called Re:Public, located in the hip new South Lake Union neighborhood that is being revitalized by Microsoft Millionarie Paul Allen, but has been slow to take off. Their second stop was at the Garage, a warehouse on Seattle’s alternative Capitol Hill, which has been converted into an over-21 pool hall and bowling alley.

Re:public, which is not yet a year old, has never done a daily deal before, but the Garage was a veteran of the process, having participated in a LivingSocial voucher a year ago and experimenting with a handful of smaller competitors since. It has not worked with Groupon.

Re:Public

On an early afternoon, before the happy-hour crowds start to filter into the bar and restaurant that serves upscale dishes like grilled octopus and oxtail ragu, Burrough and Jigamian make an appointment to see co-owner Matt Greenup.

To get the conversation rolling, Burrough tries to get to know him by asking about the business.

Greenup explains that they were one of the first restaurants in an unestablished neighborhood. They opened before the streetcar ran from the downtown core and before Amazon.com relocated thousands of workers to new buildings nearby. It’s been hard, but they’ve also done a good job at filling its 115 seats in the early evening and on weekends. But not late at night when the vibe goes from upbeat to lowkey.

Enough about Re:Public. Now, Burrough introduces LivingSocial to Greenup.

On her iPad, she breezes through a presentation, moving from one slide to the next with the swipe of a finger. She keeps it light by joking that next she’ll be performing an interpretive dance routine. It’s a joke that makes this more of a friendly situation than a business meeting.

Some of the highlights:

• We have 10-plus million subscribers.
• We have 200,000 subscribers in Seattle.
• Our subscribers are between the ages of 20 and 40 with extra money to spend.
• You get a check from us in addition to 24 hours of exposure on our site.
• You get great social media exposure through our “me plus three” offer, which encourages people to share a deal with others.

But Greenup has concerns.

Re:Public has stayed away from discounts because their food is one of their highest costs. ”It’s a financial decision for us as to whether we want to cut into our profits,” he said. “If five tables are getting 75 percent off, that’s a big difference in return.”

To resolve those fears, Burrough has solutions.

She said they could make dinner reservations mandatory to ensure that a large number of LivingSocial participants came in on the same night. The description could also encourage users to come late at night to fill empty tables.

Jigamian adds: “You are already offering discounts at happy hour.”

But the pressure stops there.

Burrough offers to keep in touch and to send some ideas to him over email.

The Garage

Now a hardened veteran of the process, owner Mike Bitondo was way beyond needing a flashy iPad presentation, and knew exactly what questions to ask.

Burrough acted as if they were friends who were catching up for the first time in awhile, and she had a lot to update him on with what’s changed over the past year at LivingSocial.

“We are better at managing the online redemption online,” she said.

Relieved to hear it, Bitondo said: “I’m sure that was the number one thing people asked for.” If only you could go back in time, he said, so that his 70 employees spread across six different bars wouldn’t have to continue manually checking off some of the 1,200 vouchers that still haven’t been redeemed.

“Only if you have a DeLorean,” she said with dead-pan humor.

Back to the future, she quickly adds that they do have smartphone apps, and secret shoppers who will report back on their experiences of being a patron. They also have free advice on how to update their Facebook page, or will even shoot a video for some of their best clients.

Overwhelmed by copycats calling him, Bitondo goes on a bit of a rant:

He’s heard from sites focused on families to ones that focus on giving back a percentage of the profits to good causes. The phone calls are nearly daily. “My big turn-off is that these people think they are geniuses, and that they have this really good idea. But in reality they want to take a large commission for sending out a mass email. It’s a transparent concept and they pretend to have this big facade about how great it is.”

Having said that, he’s willing to consider doing another deal in the slow season with someone he’s already dealt with. ”I have 40,000 square feet. It’s hard to fill a 1,200-person venue every day.”

He can only guess how many will sell this time now that LivingSocial is far less obscure. “I’m scared to think how much we might do this time,” he said.

For nearly a full day’s work, Burrough left empty-handed, but convinced that both would participate. The last we checked, she was still in discussions with Re:Public and The Garage with paperwork nearly completed for at least one of them.

]]> http://allthingsd.com/20110502/a-day-in-the-life-of-a-sales-person-on-the-front-lines-of-the-group-buying-frenzy/feed/ 0 http://allthingsd.com/20110322/t-mobiles-412-million-media-hole/ http://allthingsd.com/20110322/t-mobiles-412-million-media-hole/#comments Tue, 22 Mar 2011 13:00:20 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=31010 Those “AT&T is a crappy network” ads will go away if regulators sign off on the carrier’s $39 billion deal for T-Mobile. And so will some $412 million a year in ad spending.

Or, perhaps $600 million. Depends on which estimate you want to use for T-Mobile’s annual marketing outlay.

The first, which doesn’t include Internet advertising, comes from Nielsen. The second, which presumably does, comes from WPP’s Kantar Media.

In any case, T-Mobile and parent Deutsche Telekom spend a lot on advertising each year, but not nearly as much as their peers. Nielsen pegs AT&T’s annual spend–just for wireless ads–at $896 milllion; Sprint at $616 million and Verizon at $979 million.

It’s important to note that AT&T will end up replacing some of T-Mobile’s ad spend, but not all of it. As Shira Ovide notes, cutting down on duplicative advertising is part of the rationale for the deal.

Nielsen provided me with a detailed estimate which breaks down how much of each of the carriers spend per year, on every category but Web spending and “spot” TV buying (ads bought ad hoc instead of in advance).

You can see the whole thing at the bottom of this post but if you’re impatient: Not surprisingly, the carriers spend the most, by far, on broadcast TV, followed by cable TV, Spanish-language TV, and then local newspapers.

As far as Web ad spend goes: The carriers spend a lot online, too. But tracking for that stuff is much more hit and miss. Nielsen used to provide a guesstimate for display ads, but doesn’t right now. When they did, though, AT&T and Verizon were frequently in their top 10 lists.

One other note: Lots of people are passionate about Carly Foulkes, the T-Mobile spokesmodel who wore a pink and white dress in all those ads. But I’m the kind of guy who was always more interested in the “AT&T”/John Hodgman guy. Go figure.

It turns out the actor’s name is Dan Bakkedahl, and he used to be on the “The Daily Show”, and I was wondering what he thought about this. Alas, “T-Mobile would like Dan to wait to do any interviews,” his manager informs me via e-mail.

OK. But as soon as he’s ready, he’s got an open forum here…

Wireless Carrier Ad Spend July09-June10

]]> http://allthingsd.com/20110322/t-mobiles-412-million-media-hole/feed/ 1 http://allthingsd.com/20110318/qa-new-york-times-digital-czar-martin-nisenholtz-on-the-paywall-pricing-google-and-apple/ http://allthingsd.com/20110318/qa-new-york-times-digital-czar-martin-nisenholtz-on-the-paywall-pricing-google-and-apple/#comments Fri, 18 Mar 2011 10:30:20 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=30881 A lot of you have done a lot of reading, and a lot of writing, about the New York Times’ digital paywall/subscription plans. And if any of you who care about this stuff haven’t read Ken Doctor’s dissection of the strategy, go do that immediately.

Back? OK. For extra credit, here’s a condensed and edited–but still very long!–version of a chat I had yesterday with Times digital czar Martin Nisenholtz. I’m not convinced Nisenholtz is convinced that the plan the Times rolled out yesterday is the best possible plan. But if that’s the case, he certainly didn’t let on.

The big takeaways:

• The Times is limiting referrals from Google because it can. Specifically, it’s taking advantage of Google’s “first click free” program. (Worth noting that the 5-a-day limit gives you another 150 articles or so a month above the initial 20-per-month cut off. So it’s not particularly punitive.)
• The Times is charging more for access to its iPad app than for smartphone apps, because it thinks it can. iPad users spend more time with the paper, and the Times thinks people who spend more time with the paper will pay more for it.
• The Times only expects a small sliver of its Web readers to become paying users. Niseholtz doesn’t exactly say this out loud, but if you piece together his commentary, that’s what he’s saying. He doesn’t expect the “vast majority” of readers to ever see the paywall, so what he’s really trying to do is convert a percentage of the remaining minority. But if you’ve read Doctor’s piece, then you already know this.
• The Times isn’t trying to price its digital subscriptions in a way that protects its print subscription business. On the one hand, this makes sense–after all, the subscription plans are aimed at converting heavy users of its Web site who aren’t already print subscribers. On the other hand, given that print subscribers remain the Times’ most valuable asset, this one seems hard to reconcile.

Peter Kafka: Just to be clear, when the Times says non-subscribers can read stories above their 20-per-month limit if they come from referring links, you’re not just talking about Twitter and Facebook, but any link from any site, right?

Martin Nisenholtz: That’s correct.

Kafka: It could be the Journal. It could be a blog, it could be the Financial Times, anything on the Web, right?

Nisenholtz: Yes. The only other thing is that Google has a methodology where they can limit the number of inbound links per day, and we intend to take them up on it.

Kafka: So that’s Google doing the actual gating, not you?

Nisenholtz: Right. They had made this feature available prior to us going pay, so it’s not like it was inspired by us per se. We’re just taking advantage of it.

Kafka: Why limit Google’s links, but not any other site’s?

Nisenholtz: I think the majority of people are honest and care about great journalism and the New York Times. When you look at the research that we’ve done, tons of people actually say, “Jeez, we’ve felt sort of guilty getting this for free all these years. We actually want to step up and pay, because we know we’re supporting a valuable institution.” At the same time we want to make sure that we’re not being gamed, to the extent that we can be.

Kafka: But if you really do want to game the wall, you’ll be able to do it. You could could go through Microsoft’s Bing, for instance.

Nisenholtz: We’re obviously going to be vigilant over the next couple of months, in looking at the ways that people are doing that.

Kafka: I’m surprised to hear you say you’re going to spend calories trying to make sure that people don’t abuse the system. I would think you have other things to do.

Nisenholtz: I don’t think we’re going to spend enormous resources to go tracking people down. But at the same time, we’re going to obviously work to see where the source of these workarounds are, and work to close them off, if they become substantive enough.

But in looking at the research that we did, we expect [paywall jumpers] to be a very significant minority, a small, small number of people. When you look at your Twitter feed, based on the people you follow, it probably seems like it’s looming very large. But in the scheme of things, among people who don’t live in Silicon Valley or don’t cover it, the vast majority of people do not have this on their minds.

Kafka: What does research say about the total number of subscribers you can expect?

Nisenholtz: Obviously we haven’t released that. We are very, very confident, based on three rounds of research with three separate groups of loyalists, three separate vendors, over three separate time periods, that the conversion rates among that group are going to be sufficiently high to layer in the second revenue stream.

But I’d just remind you that we’re still very much in the advertising busienss. It’s our core business. We don’t expect the vast majority of our users to see the paywall, and we expect to remain a very very large player on the web. The conversion rates are built off of folks who are fairly heavy users.

Kafka: Why charge different prices depending on the screen–laptop, smartphone, iPad, etc–your subscribers use to read the Times? Netflix charges one price and that seems to work well for them.

Nisenholtz: We built the pricing architecture off of the research as well. We basically found a greater willingness to pay among iPad users. We see iPad app users spending much much more time with our brand than either Web users or smartphone users. So the more you use it, the more you value it.

This pricing research was very clear from a consumer perspective. It was not built off of what we charge for the paper, or what we think we desrve, or anything like that. It’s what our loyal users said they would be willing to pay.

Kafka: For first-time subscribers, at least, you can get more for your money by buying a print subscription than a digital-only offer. I assume that’s intentional.

Nisenholtz: Not really, no. I don’t think anybody ever had a discussion of favoring print over the Web. This research was done on digital loyalists. Obviously, the print subscribers are very, very valuable to the franchise, but I can’t remember a single disucssion where we linked the digital price point to our print subscriptions.

Kafka: You announced this in January of 2010, and now you’re going to launch it in March 2011. I know you spent time researching your customers, but what else have you been doing?

Nisenholtz: If we were just rolling out a web-only digital subscription to the Times website it would have been a 3-month project. But you have to remember that we were very intent on trying to create the kind of customer view that took customers in one setting–for whatever they had–across platforms.

What that means is we had to tie in a legacy circulation management system, as well as a digital system, as well as our legacy customer systems. You have these big iron legacy systems that have to be joined with web systems.

For us, the 14 months didn’t feel like a particularly long time. We were starting from a standing start.

Kafka: When Apple announced its subscription plans last month, you guys said, essentially, that it wasn’t going to affect your plans. And now you’re working within Apple’s new rules. Did you know about them in advance?

Nisenholtz: No. We had heard the same rumors that you had, so we knew what the rumors were. But we heard about Apple’s plans pretty much at the same time as everyone else.

———-

Again, the Q&A above is an edited excerpt of our chat. As an experiment, I’m embedding our entire 21-minute conversation here, just to see if anyone derives any value out of it. I can’t advise listening to it, as the sound quality is sub-optimal (it’s recorded via a BlackBerry’s speaker phone onto a digital recorder) and it’s also, um, rambling. But if you’ve got a weird desire to see/hear some Web content sausage being made, have at it.

[UPDATE: The Times argues, gently and politely, that it would have been nice had I told Nisenholtz in advance that I intended to publish the audio of our conversation. I think they're right, so I've taken down the track.]

]]> http://allthingsd.com/20110318/qa-new-york-times-digital-czar-martin-nisenholtz-on-the-paywall-pricing-google-and-apple/feed/ 11 http://allthingsd.com/20110316/qotd-in-which-google-guilty-even-if-its-not-really-true/ http://allthingsd.com/20110316/qotd-in-which-google-guilty-even-if-its-not-really-true/#comments Wed, 16 Mar 2011 16:04:43 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=30795

“I killed newspapers.”

– Eric Schmidt’s suggested epitaph, via Washington Post legend Bob Woodward. It’s not accurate, of course–real culprits range from an overabundance of commodity news, to the evaporation of classified ads and monopoly ad pricing to an over-reliance on debt markets–but it is pithy.

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