Wednesday, May 30, 2007

Predicting the Weather

Michael Parekh compares the unpredictability of identifying a best seller to the problem of designing a highly-trafficked site. "The book industry has had to live with the realities of the long-tail ... for centuries. Their customers have generally had so much product to choose from at a time and place of their choosing, at relatively affordable prices." Millions of readers may flock to a given site but at times driven by a confluence of factors that are difficult to predict.

Rupert Murdoch's New Corporation executives found that:

For every print reader a newspaper loses, it currently needs 100 online readers to generate the same amount of revenue. ... Another slide posited that of the millions of readers who come to various newspaper sites in a given month, a huge majority come only once, a consequence of all those referrals from search engines and aggregators.

An online site is different from a newspaper not only in that it has to interact with its readers (who are sometimes its contributors) but it also affected by other online objects, such as referrers or even the news events themselves. Those factors existed in the print age too, but the Internet's speed makes it possible for storms of traffic to move from one virtual site to the other within hours.

To some degree being online means giving up a degree of control over your site. On some days you will have a huge amount of traffic and on others very little. Despite the best efforts of online editors it is sometimes difficult to see what changes on the page have contributed to a particular result.

While it is tempting to think that some blockbuster post, some spectacular article may have driven the traffic for that day; and while this may in fact be the case -- it is probably more correct that the long term factors count for more. A site's information architecture, its interface, its design and the general level of its content may be the final determinants of its relative success. What happens on a given day, evidence of monster posts to the contrary, is probably a matter of luck or more precisely of a complex condition that is difficult to understand.


Blogger Skip said...

The problem that newspapers are facing is that their whole business model revolved around selling advertising to pay for the salaries of people who produce only about a small percentage of its content. I'd guess that the typical dead tree edition of a newspaper is 50% ads. And the 50% that's not ads is probably split up 90%/10% between wire reports and original content.

Unless you're a newspaper who's at the spike of the power curve, that 90% wire reports have very little value, so you can't make much off of ads for that content any more. So even if you have ad rates comparable between online and not online, you simply can't afford to pay the people who created the 10% the same salaries.

On the other hand, the cost of creating the content has decreased. So that tells me that the future of 'news' is probably going to be in aggregation sites, like techmeme. News will essentially be produced by nothing but stringers, assuming that a model can be created where they can get paid.

5/30/2007 04:17:00 PM  
Blogger alohasteve said...

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5/30/2007 04:22:00 PM  
Blogger John Lynch said...

You can't learn much from looking at successful websites. For each one there's another 100 that fail, even though they do the exact same things. You can improve your odds, but they'll never be good.

Newspapers are being done in by scalability. Rewards are great for a few and meagre for everyone else. It's just like the music and book industry.

If they stick to news (particularly local news) and quit trying to compete with free opinion websites that would help. Giving away information that they don't have to is also dumb. They should charge money for information that can't be had any other way.

5/30/2007 04:25:00 PM  
Blogger Chavo said...

I don't believe the publishing industry is alone in it's predicament. As a florist, there are literally hundreds of avenues a consumer can choose from, farmer's markets, Home Depot, Costco, the local grocery store, even 7-11 sells flowers.

It is very difficult to rise above the signal-noise ratio.

Personally, I choose not to compete with the above. For one thing we can't compete on pricing. Second I wouldn't want to even if I could - we're a high end florist who offers only the highest quality flowers and designs. That is our niche and that is how we've become the top florist in San Diego (at least to those who know better).

So at the fundamental level it is the product that counts first. But that is usually the easy part, getting those folks into your shop, blog, newspaper...

That is the hard part.

I've spent tons of money on advertising, PR, etc... with no quantitative effect. To my mind, the most effective (and easily quantifiable) marketing is word of mouth. That said, it is extremely inefficient, in that it's a long slog.

Once, they've heard about you and have seen your work, then it's up to you to make sure they come back.
That's where value added customer service is essential. I tell my staff that we as a company do well, they do well. I try to impress upon them the direct correlation between sales revenues generated by their efforts and their paycheck.

They say, sh*t rolls down hill, this is always evident when I walk into a shop where the clerk takes my money, never looks up, never says thank you and gives me my change. When I encounter that I know that management doesn't give a damn about the employee or me for that matter.

Now I'm rambling, but I think you get the point.

There is a huge element of luck involved, but ultimately it is content, content, content followed by a lot of hard work.

5/30/2007 04:38:00 PM  
Blogger Brock said...

Newpapers would get more return customers if they let readers subscribe to individuals writers. My "New York Times" is Google Reader, but it doesn't have to be 100% bloggers. The whole NY Times (or the whole WaPo) is too much, but I'd subscribe to individuals columnists within their organization if they'd let me.

But that's the whole problem. The newspaper editors & owners used to be the intermediaries between reader and writer. It was expensive, which meant the margins were enough to live on. No more. There's no profit to be made there since costs have been driven to zero by the internet. They have to add real human value (copy-editing, etc.) or call it quits.

"You have been ... disintermediated."

5/30/2007 05:58:00 PM  

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