Wednesday, January 28, 2009

Henry Blodgett at SIIA: Online Journalism

Henry Blodgett is CEO of Silicon Valley Insider Inc., has a substantial background in financial services, and his book, The Wall Street Defense Manual, came out in 2007. His talk was on "The Rise of Online Journalism", and concentrated on how sites like Gawker Media and Huffington Post are competing with "old media", i.e., print newspapers who have gone online, with varying degrees of success. It was an entertaining and informative talk, which I attempt to summarize here.

New media isn't just old media put online - it's conversational (informal), interactive (you can talk back), 'snackable' (delivered in bite size chunks), real-time (as the story unfolds), and involves both serious aggregation of multiple sources and the kind of high-velocity production you associate with broadcasting rather than text. You float stories, get reactions, refine, correct, elaborate, and hopefully converge on the truth. It mixes video, images, text, audio, etc (a.k.a. omnimedia).

Some interesting facts. Gawker has multiple Tivos running at any given time, watching TV to find interesting clips. HuffPo aggregates stories from all over, and puts its own spin on them (usually political). Gawker now has 2 times the online traffic of the LA Times, while HuffPo has overtaken the Boston Globe in online page views. This despite Gawker haviung 80 editors to LA Times's 200; HuffPo has about 20 editors apparently.

What does it all mean? Mr. Blodgett claims that we are seeing "creative destruction" of old media leading to a better future. It's hard to be cheerful about destruction at the present time, but it's also hard to disagree that B2C information sources like traditional newspapers are in a difficult bind. If they embrace the Web, it's hard to build margin with online ads, but if they stay offline, or just give it away, they're in trouble anyway.

Wall Street Journal's hybrid model is held up as a good compromise. Unlike New York Times, they do charge a subscription for their online property (I have one), but they are also crawled by search engines like Google, and monetized by ads. Consumers still get quality journalism, but now their are multiple routes to consuming it. It remains to be seen how sustainable this is, or whether it works for everyone, but in the meantime newspapers (like our own Minneapolis Star Tribune) are struggling.