The Financial Times shows how data-driven is done

The Financial Times launched its metered model years ago, which puts it way ahead of the current paywall curve.

After reading through this Mashable piece, it’s clear that all of the FT’s paywall experience — and, importantly, all of its related data — has made the organization quite savvy. For example:

Looking through some of the reader data — the FT’s data team now numbers more than 30 across three groups — the FT was able to recognize the kinds of patterns readers display before purchasing subscriptions. “We would see the sort of articles they were reading and the frequency they were reading those articles, for instance, and we began to map those,” [CEO John] Ridding explains. “People do behave in predictable ways.”

“… the FT was able to recognize the kinds of patterns readers display before purchasing subscriptions.”

That, right there, is how you put data to use.

The full article is worth a read.

Freelancers and editors, we will figure this out

Whose fault is it?

That’s the question that’s rattling around my head after the dustup between freelance journalist Nate Thayer and The Atlantic.

For those who may have missed it: Thayer was asked by an editor at The Atlantic if he could condense his feature story “25 Years of Slam Dunk Diplomacy” into a 1,200-word version that would run on The Atlantic’s website. The catch was that he’d be doing this extra work for exposure, not money. (That’s quite a catch. Editing 4,000-plus words down to 1,200 is no easy task.)

Thayer’s blog post chronicling the exchange inspired a lot of follow-up. Of particular note:

  • The comments on Thayer’s post morphed into a virtual support group / troll target.
  • Reuters’ Felix Salmon used the moment to note differences between print freelancing and digital freelancing. (This was my favorite of the fallout pieces.)
  • Alexis Madrigal of The Atlantic wrote … you know, I’m not sure what he wrote. He was angry and passionate and I think he meant to defend his colleague and his publication. His response was a jumble of thoughts — many of them smart — but my real takeaway from his piece was that everyone is anxious about this stuff.

At first, I read these posts because they’re gossipy. I enjoy watching journalists go after each other because a snarky journalist is often an entertaining journalist. Anger leads to focus and focus leads to excellent word choice. These folks do know how to turn a phrase.

But as I read more and felt my own anxiety rising, I tried to understand the bigger pressures at play.

And that’s when I picked up on the weird blame thing that runs through all of this.

We’re all so incensed. Freelancers think the editors are low-balling on purpose. Editors complain that freelancers don’t understand the economics of digital.

Pointed fingers. Thumped chests. Pitchforks and torches.

Yet, there’s nowhere to march. The rage can’t be released.

Why? Because the question I posed at the beginning — Whose fault is it? — has two answers:

1. It’s no one’s fault.

2. It’s everyone’s fault.

Digital evolved out of a stew of history and context, propelled by a fundamental catalyst: information exchange always chooses the path that’s faster and easier. In that sense, there’s no one to blame. It all just happened because that’s how information works.

But we — all of us — also made digital what it is through our collective adoption. We’re the ones who commoditized content. We turned to digital services and devices because they offered better options than their ancestors. In that sense, everyone is to blame.

Now, this is supposed to be the “so what?” part of the piece. It’s where I outline my brilliant five-step plan for the thoughtful advancement of the journalism and content industries.

Well, I don’t have a plan. No one has a plan.

I’m optimistic, though, and that counts for something. (Stop rolling your eyes.)

All the anger and anxiety we’re feeling can be productive. It shows we care. We want to assign blame and move on. We want to figure this out because we like doing what we do and we want to keep doing it.

That makes me think we’ll get it together. Yes, this smacks of blind faith. I’m okay with that.

There’s more to it, though. There’s also a business here.

I believe digital publishers will find their natural revenue levels — and those levels are not at or near zero. In time, publishers will regroup and build those levels up. They’ll want to do more and get better, and that improvement will require finding and paying people to do better work for better fees.

We’re already seeing hints of this. Take a look at Quartz or BuzzFeed or Gawker. There’s no slideshows. Not a pop-under in sight.

These outlets still have revenue gimmicks, that’s true, but they’re new gimmicks. They aren’t clinging to old ad and sponsor methods. The people behind these sites are trying new things, and these new things are much closer to the mark.

That’s a small signal, but it’s a positive one. We’re circling closer to the sweet spot of content, audience value and revenue. Once we hit that, we’ll move into the building phase.

It’s important to take a step back. To look at where we were and where we are. The process isn’t fast enough and it’s still frustrating, but fundamentally we’re improving.

So that’s the only plan I can see. Keep getting better. Keep getting closer.

And if we do that, I believe we’ll figure this out.

Social media doesn’t make money directly, but it still has enormous value

Perhaps it’s a function of the intricate tracking the Web provides, but I’m still amazed at media’s inability to grasp the secondary (and often, tertiary) value of community efforts. So let’s make this as clear as clear can be: Twitter,…

Perhaps it’s a function of the intricate tracking the Web provides, but I’m still amazed at media’s inability to grasp the secondary (and often, tertiary) value of community efforts.

So let’s make this as clear as clear can be: Twitter, Facebook, forums and other social media functions rarely make money directly. Their value comes from the attention they gather and the opportunities that attention creates. If you have a mass of people who have willingly opted-in to your messaging, you damn well better put useful, for-pay products in front of them. Otherwise, all you’ve got is a social club.

This recent piece from Forbes does a nice job tearing down the direct-revenue mindset.

Judging Dell’s Twitter revenue against company revenue misses the point

If Dell turned heads last year when it claimed to have made $1 million through Twitter, its revised estimate for 2009 is going to cause nasty neck pulls: the company says Twitter revenue jumped to $6.5 million. (I’m assuming that…

Twitter and DellIf Dell turned heads last year when it claimed to have made $1 million through Twitter, its revised estimate for 2009 is going to cause nasty neck pulls: the company says Twitter revenue jumped to $6.5 million. (I’m assuming that spans multiple years.)

The Guardian has a nice bit of analysis on the announcement. It’s informative and interesting. It weaves in some contextual bits. But nestled amidst the numbers is the “drop in the bucket” paragraph that always pops up in these types of stories:

Although $6.5m sounds impressive, when you compare it with the net revenue of $12.3bn Dell reported in the first quarter of fiscal year 2010 it becomes clear that this is only a drop in the ocean …

Sorry. I guess that’s a ” drop in the ocean” paragraph. You get the idea.

I understand the need to insert this text. Its absence would surely raise a red flag for editors and consumers alike. But there’s an underlying perspective here that I believe is damaging, and I wish more analysts would call this out.

Social media exists in a space totally different from traditional business. Activity takes place at the edges, not the center. It’s ambiguous. It’s fleeting. Because of all this, judging social media efforts against traditional channels obscures the real analysis and the real opportunity.

What’s notable about Dell’s Twitter revenue is that it went from $1 million in 2008, to $3 million in June ’09, to $6.5 million now. That’s an enviable trajectory in any business, but it’s doubly impressive here because Dell is making actual money through a nascent system. It found a way to put social media’s tricky architecture to work.

That’s key. Digital disruption is wiping out the fat revenues from traditional models. Many businesses will get smaller simply because consumers have more power and more choice. The companies that find ways to make money within this new landscape — even relatively small amounts of money — have a better shot at adaptation.

Images courtesy Dell, Inc. and Twitter, Inc.

Well, damn. DVRs aren’t so bad for advertising after all

Remember how DVRs were going to kill TV advertising real bad? Yeah … about that: Against almost every expectation, nearly half of all people watching delayed shows are still slouching on their couches watching messages about movies, cars and beer….

Remember how DVRs were going to kill TV advertising real bad? Yeah … about that:

Against almost every expectation, nearly half of all people watching delayed shows are still slouching on their couches watching messages about movies, cars and beer. According to Nielsen, 46 percent of viewers 18 to 49 years old for all four networks taken together are watching the commercials during playback, up slightly from last year. Why would people pass on the opportunity to skip through to the next chunk of program content?

I love the explanation for this seemingly impossible turn of events:

The most basic reason, according to Brad Adgate, the senior vice president for research at Horizon Media, a media buying firm, is that the behavior that has underpinned television since its invention still persists to a larger degree than expected.
“It’s still a passive activity,” he said. [Emphasis added.]

Sure is! Never underestimate the power of passivity.

The New York Times deserves kudos for writing this story because, far too often, the Chicken Little projections of execs and analysts are left unchecked. Consumer behavior and disruptive technologies are moving targets, so remember that the next time the latest iPhone killer or Kindle killer or ad killer or media killer is touted. Reality is contextual and complicated.

“User” and “Customer” are Different Animals In the Freemium World

The New York Times’ recent piece on Evernote inadvertently cracked open an important question in the “freemium” discussion: What’s the difference between a user and a customer? The language attached to freemium business models requires specificity because these businesses associate…

The New York Times’ recent piece on Evernote inadvertently cracked open an important question in the “freemium” discussion: What’s the difference between a user and a customer?

The language attached to freemium business models requires specificity because these businesses associate expectations with distinct user groups. With freemium, there’s a vast canyon between free access (users) and pay access (customers); they are not synonymous. That’s why the following clarifications are necessary:

User — A visitor who accesses a site, product or platform, but does not pay. Example: I use Dropbox, but I don’t pay for the top-tier services (yet …)

Customer — A converted user who now pays for premium access or services. Example: As my storage needs increase and I become more reliant on Dropbox, I’ll likely convert into a paying customer.

I realize this entire post teeters on nitpicky semantics, but heated debates require clear boundaries.

Sidenote: I highly recommend the Times’ Evernote story. It’s a great representation of the opportunities and obstacles that come with freemium models, and it has actual numbers.