Mark Cuban is right. This is why we take every opportunity in this blog to point out that newspapers and magazines need to stop giving away their content for free in the hopes that web traffic will magically result in revenue. It is not working and never will. There is too much online inventory for print pubs to ever realize a premium for their online products. The only ones benefiting are search engines and they make enough money without being subsidized by print.

Full story here

Excerpt from AdWeek:

Content aggregators and search engines are vampires, and newspapers are the chesty blondes who fall victim to their charms -- and ultimately get bitten.

That's the basic assessment of the traditional media business' approach to the Internet, according to Mark Cuban. During a keynote address today at the AlwaysOn OnMedia NYC 2010 Conference, the HDNet president/CEO and famed provocateur called for newspapers and magazines to fight back against sites that link to their content.

"Everybody wants to take your content," said the Dallas Mavericks owner before a room full of media executives gathered at the Mandarin Oriental Hotel in New York. That's not going to change, "unless you put a stake through their gosh darn hearts."

Cuban particularly called out Google as a Web giant that continues to reap benefits off of the valuable content that traditional media companies produce. "Google is a vampire, and you run scared," he said. "There is no reason to be indexed in Google."

For too long, Cuban said, newspaper and magazines have viewed traffic to their Web sites the same way that stores view customers coming through the door -- and have been fearful of turning down any opportunity for more traffic. Yet, he said, readers who find headlines via Google rarely convert to traffic, and publishers have a hard time monetizing that traffic. "You haven't gotten anything back except that you've turned into zombies," Cuban said.

Plus, in his mind, Google reaps the branding benefit of that content when consumers access it through a search or through Google News. "Whose brand do you think [users] have in their minds?" he asked.

From SeekingAlpha, read full story here.

Mark Cuban makes some good points, He obviously isn't familiar with Mediabids- that's ok, I am not sure how the Mavericks are doing this season, so we are even. But seriously, worth reading and it is always worthwhile to read someone calling Google out for its hypocrisy.

Google (GOOG) is unquestionably the best at selling advertising online. They can sell Text, Display, Video at a level that is unparalleled anywhere. True ? The Newspaper industry obviously sucks at doing the same. Eric Schmidt said so in his editorial in the Wall Street Journal.

So why isn’t Google taking advantage of this unique opportunity ? Why not just offer a specially tailored version of AdSense for Newspapers ? They do what they do, create content. You do what you do, generate content and sell ads ?

Makes sense. Won't happen.

Why ? Because of the Google hypocrisy in play. This argument is no different than the same argument they made with Youtube and the music and film industries. All those movies, tv shows, music videos on Youtube were GREAT PROMOTION. The music and movie industries shouldn't blame Google if they don’t know how to monetize all the billions of views and impressions Google and Youtube provided the content industry. Right?

But a funny thing happened along the way. Google caved on Youtube. Their message is no longer “if you cant monetize the traffic, tough luck”. Youtube is now sharing revenue with as many music and video content sources as they can. They are even setting up VEVO a satellite music video site built around Universal Music Group content.

There is absolutely zero chance that the end of this discussion is Google saying “You will take our traffic and like it”. Google is posturing. They recognize they have the advantage. Particularly if MicroSoft/Bing (MSFT) do nothing with Newscorp (NWS). Its only a question of how they use it.

 

From MinOnline. Read Full Story here

Hearst Reveals Skiff E-Reader

By Steve Smith

The e-reader field is getting more crowded by the day. Hearst subsidiary Skiff offered up the specs and first images of its portable digital reading device before the Consumer Electronics Show (CES) was set to launch this week in Las Vegas. The Skiff Reader will try to distinguish itself from the Kindle, nook, Sony eReader, QUE and other e-ink devices with size and portability. The 9 x 11-inch unit will hold an 11.5-inch (measured diagonally) display, which does out-size the large Kindle DX and the Plastic Logic QUE. (More images are below.) This display uses a special ‘metal foil’ technology that offers touch screen interaction but does not require a glass protective coating. The 1200 x 1600 resolution screen will run at 174 dots-per-inch, which should appeal to print newspaper and magazine publishers looking for greater detail. The screen is still black and white, however, and it remains to be seen how quickly an e-ink display at such high resolution can refresh itself as it changes pages. One of the chief frustrations of the e-ink devices is their very sluggish performance and muddy display of images.

The Skiff Reader is putting a premium on paper-like portability. It claims to weigh just above a pound. The battery is expected to last a week under standard usage. The device also sports 3G and WiFi wireless connectivity as well as a USB port for side-loading content from a PC.

The Hearst-owned company is putting print publishers front and center in this model. The company says the Skiff will access an online store of newspapers, magazines, books, blogs and other content from a range of publishers. The Skiff is promising to host print brands with unique design attributes, interactive elements, and dynamic content updating “that help publishers differentiate themselves and attract subscribers and advertisers,” the company said in its statement.

Sprint will provide the cellular network for downloading content almost anywhere, but the wireless carrier will also provide a distribution channel. Unlike the Amazon Kindle (available online only), the nook (available in Barnes & Noble) or the Sony eReader (in bookstores), the Skiff will leverage Sprint’s 1,000 phone retail outlets. Other distribution channels will be announced later, as will pricing and date of release.

Finding the right distribution mechanism for the Skiff could prove its toughest challenge. Obviously, the B&N venue would favor its own device, even if it did open itself to multiple vendors. Borders Books retail stores have been featuring the Sony devices for some time. And Skiff has no brand recognition of its own with which to build much of an online draw to an e-commerce site. Relying on a tech provider like Sprint is dubious, since wireless carriers do not have expertise in selling content-centric devices. In fact, content partners to the major carriers have long complained how poorly these tech-driven companies merchandize mobile content.

To make matters worse, all of the e-ink readers are about to be eclipsed by the relentless hype surrounding the rumored release of an Apple tablet, which many expect to be announced later this month.

Nevertheless, the march of the e-reader devices continues, with voice-recognition innovator Ray Kurzweil announcing a new color e-reader, the "Blio," today at CES.

Sit back and watch the fragmentation begin.

From Marketing Charts. Read full story here.

They are not right about the long-term viability of alternative methods of delivering news via e-reader type devices but this story points out some of the horrible economics currently in place for publishers distributing content on Kindle and similar devices. One missing ingredient the story does not mention - ads. Currently the e-readers don't deliver the ads with the content but presumably when that begins, it will change the equation.

E-readers, Tablets Not Likely To Save Newspapers

Some industry watchers had predicted that e-readers just might save the newspaper industry - but that has yet to happen, despite the fact that e-reader sales are soaring, reports MediaBuyerPlanner.

About six million e-reader devices - including Amazon’s Kindle, Sony’s e-reader, Barnes & Noble’s Nook, and Conde Nast’s Skiff - will be sold this year, Forrester predicts (via EditorsWeblog).

Newspaper publishers get 30% of subscriptions sold on e-readers, and more newspapers are becoming available every day. Digital newspaper distributor NewspaperDirect, for example, is boosting the number of newspapers and magazines available on the Kindle by 1,400, according to Canada’s Globe and Mail.

Newspapers Can’t Make E-reader Numbers Work

But six million e-readers sold are a pittance when compared with the general US population of more than 300 million people, and the number of newspaper subscriptions sold via those devices will be even smaller. “If the Dallas-Fort Worth area has two percent of that, that’s only 6,000 Kindles,” said James Moroney, publisher and CEO of the Dallas Morning News. Moroney crunches the numbers in a Portfolio article, showing how insignificant e-reader subscriptions really are.

Tablets - the New Newspaper Savior?

Tablets are the latest device being touted as the savior for newspapers, MediaBuyerPlanner said.  With touch-screen interfaces, color screens, web browsing and e-reader capabilities, some think such devices will speed the consumption of digital newspapers. Apple’s iSlate is one such device, said to be ready for launch early this year.

However, as these devices are expected to cost as much as $1,000, they may not be considered as “must-haves” for many consumers. And e-readers boast longer battery life and text that is more easily readable.

Newspaper publishers could boost the potential to cash in on tables by fully embracing multimedia content production and multiplatform distribution, points out the Innovations in Newspapers blog, which offers 10 ways newspapers must adjust in order to take advantage of new content delivery systems like tablets and e-readers.

E-reader Audiences More Affluent, Well Educated

One hope for newspapers in terms of e-reader audiences is that users skew higher in terms of education and income than the general public, which means newspapers may be able to attract more luxury advertisers. According to Mediamark Research & Intelligence, e-reader users are 11% more likely than the average adult to own their home and are 87% more likely to have annual household income of $100K+. And they are 111% more likely than the average adult to have obtained a Bachelor’s or post-graduate degree.

“Clearly, users of the current generation of e-readers are highly educated, upscale and internet savvy,” said Anne Marie Kelly, SVP, marketing & strategic planning, at MRI.

 

We still believe that asking people to pay for content online is necessary but these results from INDenver Times are pretty disappointing. Full story from WestWord here. 

From WestWord:

"After the Rocky Mountain News shut down in February, Foster and a batch of fellow Rocky journalists started an online news site, INDenver Times, with the help of three investors. When that project faltered because a goal of 50,000 subscribers fell 47,000 short (and the investors decided against making up the difference), Foster and about half the survivors launched another web news operation, dubbed the Rocky Mountain Independent. But that ending isn't any happier. Today will be the last for original RMI content, and subscribers are being informed that they'll receive refunds. The total number who signed up? About 200, counting both annual and monthly deals."

 

I hope they are right. 

From Paid Content.org: "Forget about what you’ve heard—apparently readers are happy to pay for content. Or at least that’s what News Corp (NYSE: NWS). which plans to charge readers globally for access to News Corp websites, says its internal research has shown. According to a memo from Richard Freudenstein, CEO of News Digital Media, the online arm of News Corp.‘s Australian subsidiary News Limited, the company is confident about the success of the plan, which is entering a “second phase” in Australia.

In a memo leaked to the Sydney Morning Herald, he says: “News has conducted some audience research here in Australia and in the UK and U.S., which gives us confidence that, if we get the product and delivery system right, people will happily pay for news content online, on their computer, mobile, e-reader or other devices.”