You, dear reader, are a dinosaur. Please don’t take offence. It’s not you
that’s the problem - it’s us, the world’s newspapers. Or so we are told.
The pundits have been saying for years that simply reading these words
condemns you as a relic of social history. Newspapers, and by extension
their readers, are on their way to the fossil beds as sharper, faster-moving
websites bite and claw at their lumbering flesh.
Take last month’s British newspaper circulation figures. Only two titles saw
their sales increase compared with the year before: the Daily Star
(thanks to price cutting) and the Sunday Times.
In America, readers are fleeing online at such a rate and newspapers are
closing so fast that there is talk of nationalising The New York Times.
It’s not just print, all “old media” is suffering - even Simon Cowell. Susan
Boyle, the hirsute singing star of his show Britain’s Got Talent, charmed
the world and attracted more than 100m viewers to the YouTube video-sharing
website last month. But all that extra online exposure earned Cowell and
ITV, which screens the show, not a penny. And ITV cannot afford to miss
chances to make money. The broadcaster recently announced that it lost £2.7
billion last year after write-offs of assets.
“Television is in denial,” said Brian Elsley, creator of E4’s teen drama
Skins. “The only thing that has kept audiences glued to the screen is the
fact that most people don’t know which wire to plug into the back of the TV
to get the internet on their screens.
“All that changes with the new sets coming out this year that have internet
connections built in. There’s a real danger that audiences will drift,
advertisers will follow and there simply won’t be enough money to make
decent British TV dramas and comedies.”
Elsley was merely adding to what smart young management gurus have been saying
for years - until last week, that is. Those with finely tuned ears heard a
sudden and seemingly unconnected series of growls that proved there’s some
spirit in the old thunder lizards yet.
Perhaps, in years to come, May 2009 will be seen as the month that old media
started to fight back and as the beginning of a new internet revolution.
FIRST came news that Disney Corporation would take a stake in Hulu, a website
set up by the American networks Fox - which is owned by News Corporation,
ultimate owner of The Sunday Times - and NBC.
Hulu stores hours and hours of new and old programming - the latest 24 or
classic Seinfeld, for example - which viewers can watch for free on their
PC, all paid for by adverts embedded in the programmes. It’s just like
normal TV, but available any time the viewer wants.
Initially mocked by the technorati for its name - it means “cease and desist”
in Swahili - and because the old media has had limited success with such
ventures in the past, Hulu has turned out to be a massive hit with net users
and advertisers.
Although still way behind YouTube’s billions of video views per month, Disney
made its move just as Hulu leap-frogged Yahoo! to become the third
most-watched video site in America. Available only in the United States for
now, Hulu has already begun hiring staff and talking to broadcasters with an
eye to launching in Britain and seven other countries.
It is a bold attempt to freeze out the pirate sites that illegally copy and
share TV programmes and movies in the way Napster used to pirate music in
the late 1990s.
“It’s obviously going to be great to be able to watch The Sopranos or Cheers
whenever you want [on Hulu], although US programming is rarely watched over
here with as much passion as TV critics write about it,” said Simon Wilden,
a partner at the advertising agency Good-stuff. “What’s interesting is if
the BBC, ITV and Channel 4 get their own version - Project Canvas - off the
ground.”
Project Canvas will gather together each broadcaster’s version of the BBC’s
phenomenally successful iPlayer to offer a grab bag of the best British
programming on demand. This would spell bad news for such sites as Joost or
BlinkBox, which are shopping for TV shows to provide on-demand internet
television.
They would like to be the TV equivalent of iTunes Store, Apple’s online shop,
which is often credited as the saviour of the music industry. But if Hulu
and its British equivalent succeed, it is existing television companies that
will own the “iTunes of TV”.
Last week the world of print also received some welcome news for once. Key to
the excitement was the launch by Jeff Bezos, founder of the online retailer
Amazon, of a new version of Kindle, his firm’s electronic book reader. The
Kindle DX has a larger, roughly tabloid-sized screen designed to display
newspapers, magazines and electronic documents. Several newspaper groups
have already signed up to offer their wares on the reader.
Its launch marked a new stage in the race to capture the market for ereaders.
These are portable, lightweight devices that will eventually offer a
full-colour version of your daily paper or favourite magazine, whose pages
you will be able to flick on a daily commute without worrying about elbowing
the person next to you.
Several firms are developing their own versions that are set to hit the market
in the next couple of years. Apple, for one, is rumoured to be launching a
Kindle-style bigger version of the iPhone, capable of playing video, surfing
the web and hosting papers and magazines.
For newspaper groups, the attraction is clear: distribution costs associated
with paper would be reduced eventually to near zero if everyone used an
ereader, and they would be able to identify readers who could be targeted
with personalised advertising.
But why would readers bother when they can get their news for free on the
internet? The answer is that they might not be able to for much longer, at
least not from established sources. Last week Rupert
Murdoch, the chairman of News Corporation, announced that he planned to
start charging for access to his paper’s websites - possibly within a year -
to fix a “malfunctioning” business model. Even the head of Guardian Media
Group, one of the apostles of free news on the internet, has said they are
considering doing the same.
TRYING to get people to pay for something they have received for free is, of
course, difficult. For once, however, old media seems to have the whip hand
because things appear to be going wrong for new media firms.
There are huge problems in Silicon Valley. The sheer cost of running the huge
servers required to store tons of information has started to worry the sort
of free media and social networking sites that came of age during what is
known as the “Web 2.0” era – defined as 2004 to the beginning of the
economic crisis at the end of 2007.
All of them subscribed to a widely accepted business blueprint: build huge
global audiences with a free service and let advertising pay the bills. The
problem is: the model doesn’t seem to be working.
In April, for example, a startling report by analysts at Credit Suisse bank
estimated YouTube will lose $470m this year. Despite the site’s 41% share of
the online video market, Credit Suisse projects that it will pull
inonly$240m in advertising revenue this year against costs of $711m. Google,
YouTube’s owner, said the numbers were incorrect but refused to release any
alternative figures.
It is far from alone. Last year, Veoh, a San Diego-based video-sharing site,
decided to block its service to users in Africa, Asia, Latin America and
eastern Europe, citing the dim prospects of making money and the high cost
of delivering there.
Facebook, the social network, is also considering lowering the quality of
videos and photographs to some regions in an effort to reduce costs.
“The idea that everything has to be free was so voguishly accepted and this is
an epochal moment in the fightback,” said Ashley Highfield, managing
director of consumers and online at Microsoft and the man who created the
BBC’s iPlayer.
“That doesn’t mean everything will remain the same as always. The recession
will only encourage people and publishers and producers into the digital
world - it’s just now there’s a business model for survival in that world.”
THE precise shape of that world is unknown. Jeff Jarvis, author of the
BuzzMachine blog, remains convinced that mass media is doomed.
“I spent the last month trying to read The New York Times on the Kindle,” he
said last week. “It’s not very satisfying. If I read it on the iPhone or
online, I know it’s being updated all the time. Also I have to start at the
front page with the Kindle, most of the audiences online don’t start on the
home page. It’s no salvation. This idea that a new device will save us is
grasping at straws.”
There are signs, however, that the method of delivery of media does not change
basic human desires, which in many cases old media companies have served for
decades, even centuries.
It had, for example, become axiomatic that the multi-channel and internet era
led to a loss of that shared sense of a national television culture that
existed when there were four wonky channels with only one decent programme
between them. The days of rushing into work after, say, Morecambe and Wise
or Cracker and finding almost everyone had seen the same show are long over.
Unless, surprisingly, you are a youngster and thus the future of media. “For
younger viewers, watching TV is a social experience,” explained Tess Alps,
chief executive of the marketing body Think Box. “One of the trends that’s
growing is teens and twentysomethings watching TV and using social
networking sites like Twitter to conduct online conversations about what
they are watching.”
Lyndsey Cameron, an 18-year-old student at Durham University, is a classic
example. She prefers to use MSN’s instant messenger to Twitter but will
happily chat away to a friend on the other side of town while they watch the
same programme on TV - creating their own “virtual water cooler” that
doesn’t have to wait until the next day at college.
“It’s not like we’re going through the show blow by blow,” she explained.
“We’ll just be chatting as you would if you were in the same room, but
because we’re watching the same programme we get to discuss, say, the X
Factor vote as it’s going out.”
The “live” experience is clearly still valued. In a recent blog posting Clay
Shirky, the author and internet guru, compared the current era to the
upheaval that was caused by the invention of the Gutenberg printing press in
the 15th century. What initially seemed like incremental changes, such as
the invention of the small-scale octavo book, eventually proved hugely
influential.
“That is what real revolutions are like,” wrote Shirky. “The old stuff gets
broken faster than the new stuff is put in its place. The importance of any
given experiment isn’t apparent at the moment it appears: big changes stall,
small changes spread. Even the revolutionaries can’t predict what will
happen.”
There might yet be life left in those dinosaurs.
Additional reporting: Dominic Rushe in New York
The cool kit on its way
SONY BRAVIA
The new S series Bravia television - launched this year - will come with
internet connections built in. So no need to fiddle around plugging your
laptop into the back of your TV
APPLE TV
A box that ‘slings’ shows downloaded from the firm’s iTunes store direct to
your new wi-fi television, meaning you can watch them on a real TV screen
rather than computer or iPod
HULU
It’s a website that stores hours of hit US telly, which is available on demand
and for free. It’s on its way over here. Some UK broadcasters won’t be too
happy - if their schedules rely on imports, Hulu could seriously damage
ratings. They are preparing their own version, known as Project Canvas
PLASTIC LOGIC EREADER
The British firm’s eReader is a 10.5in plastic touch screen that’s linked via
mobile broadband to an on-demand store that will sell anything from
newspapers, magazines and books to individual articles. Due out next year
and will retail for about £300
KINDLE DX
The larger version of Amazon’s ebook reader, it has a screen two and a half
times the size of the older, book-sized model. On sale, for $489 in the US
only (for now) this summer
