Tech wrap: Is the DoJ right to oppose the AT&T, T-Mobile deal?
The Justice Department sued to block AT&T’s $39 billion deal to buy T-Mobile USA because eliminating T-Mobile as a competitor would be disastrous for consumers and would raise prices, particularly because the smaller provider offers low prices, the lawsuit said. The lawsuit is a serious attempt to halt a “fundamentally flawed” deal, not a tactic to wring out-sized concessions from AT&T, a source familiar with the lawsuit said.
Dan Frommer says blocking the deal won’t help make service quality any better. A merger would create more spectrum to offer better, faster, more reliable service, Frommer writes. Also, its shortsighted to look at today’s pricing and market and use them as strict guides for the future, as voice and SMS service are disrupted by Internet technology, and as carriers try to charge more for 4G LTE access than they did for 3G access, Frommer added.
Breakingviews columnists Robert Cox, Robert Cyran and Richard Beales say the wireless industry in the U.S. is essentially a duopoly and that the DoJ suit against the AT&T, T-Mobile deal protects smaller providers.
Earlier, AT&T promised to bring 5,000 wireless call-center jobs back to the U.S. if the deal wins approval.
Sony put price tags on its long-awaited debut tablets that could hurt the company’s chances to grab the No. 2 spot in the tablet market. Two versions of Sony’s main tablet cost $499 and $599, which matches the price of Apple’s iPads for models with the same memory and will turn off consumers, analysts said.
“Consumers want tablets but they are not prepared to pay the same amount they’d pay for an iPad for something that’s not an iPad,” said Gartner analyst Carolina Milanesi. Research firm Forrester also put out a blog post saying that Sony’s pricing “raises a red flag” and could sink tablet sales.
The Financial Times pulled its iPad and iPhone apps from Apple’s App Store after losing a battle to keep control of customer data obtained through subscriptions. Apple recently begun to insist that subscriptions to apps that it hosts must go through its own store, giving Apple ownership of valuable data about customers from those transactions, as well as a 30 percent cut of revenues. In a move to reduce its dependence on Apple and develop apps more quickly for rival tablet computers, the FT in June launched a Web-based version of its mobile app, the first of its kind by a major publisher.
A new-found app-etite for the web
But there is already a bit of a backlash, and a new awareness that the world wide (open) web may compare favorably to the walled gardens available on the iPad and other tablets.
Why are publishers already starting to re-think the future of media again? For one thing, there is that kickback to Apple —30% off the top — for selling through the iTunes store. Then there are those rules that seem to favor the functionality of Apple apps, like in-app purchasing. And, most ironically, there is the “Aha!” moment that the iPad itself has provided by highlighting what the optimized, mobile web can really be like.
The Financial Times blazed the back-to-the-web movement, abandoning the iTunes store in lieu of an HTML5 site that is still behind their paywall. Apple primed the pump by forbidding in-app sales. Amazon, Kobo and Barnes & Noble moved their stores from their iOS apps to the web.
And, what do you know? The public is better served: In a device-agnostic universe it’s better to buy on the web, which is everywhere, and consume as you like on whatever devices you have, can borrow, may become invented or are available. Even a clunky laptop.
The iPad and apps were supposed to be media’s best hope. But an entirely unintended consequence of Apple policies, and the reality of how content is best served up on flat, multi-touch screens, the smartphone/tablet revolution has paradoxically contributed mightily to the reinvigoration of web design.
The sharper focus of a smaller screen — against the digital tide of deeper, wider, taller, infinite — has imposed a new discipline. Rather than creating a need to compromise on style and substance, optimizing for smaller screens and potentially smaller bandwidth means that lazy, hazy “whatever” design is giving way to techniques which declutter the view and trim the excess weight of web pages.
Along with the physical constraints imposed by smaller screens is the appearance of the next generation of web language, HTML5, which offers developers rendering tools that were once the sole domain of proprietary software by companies like Adobe.
Reading on electronic devices is to thought as cotton candy is to fudge.
Tablets are the modern age equivalent to commercial laden television distributed over subscription only cable. Thin, shallow, popularized thought and information that is privately controlled, very expensive and propagandistic.
Computers are useful mainly to help people produce something other than subscription bills. Desktops are capable of that, with application and training and purpose, while tablets and smartphones are not.
FT hearts tablets so much, it’s spreading the joy among staff
It’s not hard to see why newspaper companies, saddled with plunging circulation and big iron presses , are so ecstatic over tablet devices. They bring a form of hope that hasn’t crossed this industry’s path since newspapers dominated classified advertising in the 1980s and 1990s making them fat with revenue and profits. Tablet computers, like Apple’s iPad and Samsung’s Galaxy Tab, just might spark renewed interest in wilted newspapers among consumers and help ease the legacy costs of paper and ink.
Consider News Corp Chief Executive Rupert Murdoch who has often expressed his love for the iPad and is busy building a team to produce a tablet-only newspaper The Daily.
The Financial Times is just as enamored and is spreading the joy offering its employees a nice chunk of change to go toward the purchase of an iPad or other tablet.
Reuters European Technology, Media and Telecoms Correspondent Georgina Prodham reports FT staff can claim 300 pounds, 350 euros or $480 towards the cost of a tablet for their personal use — about two-thirds of the cost of the most basic iPad in Britain or Germany before tax, and almost covering the whole cost in the United States.
“The FT is making this investment because digital channels and tablet devices are becoming increasingly important for us and the media industry in general, and as a recognition of your contribution to our strong performance this year,” FT Chief Executive John Ridding wrote in an email to staff.
The FT Group, owned by British media and education group Pearson, increased its sales by 11 percent in the first 9 months of this year, boosted by revenues from the FT.com, whose subscriptions rose by 50 percent to more than 180,000.
The FT’s iPad app has been downloaded more than 400,000 times since its launch in May, and has driven about 10 percent of digital subscriptions. FT.com subscriptions cost between 198 and 285 pounds ($317 to $456) per year and are the envy of newspapers eveywhere as they scramble to come up with an online paywall strategy.
New York Times: Honest work means honest pay
Some people hate The New York Times and some people love The New York Times — but everybody wants to read The New York Times for free. That will largely end in 2011. You probably read that today on the Internet, and you probably read it for free.
The Times said it will let you read some articles per month for free, then make you pay for more. It’s what the Financial Times does. Who said it had to be original? If you subscribe to the print edition, just keep reading it. This isn’t really about you. This is a decision that will, for better or for worse, inform the public that if you want journalists to tell you stuff or entertain you, you need to pay them to do journalism all day long.
Lots of people have opinions on this and lots of people have done the research. Even more people style themselves Internet experts. The one thing they can’t help is sharing opinions on whether news sites should charge or whether they’re not just misguided for doing it — but whether they’re stupid or criminally wrong.
Everybody knows the sins that newspapers committed online. People will tell you: “They should have done it in 1995. They should do this, they should do that. If they do this, they have to give up that. They’re old media, they deserve to die. They’re doomed. They should sell. Too little too late. It won’t move the needle. They’re doing the wrong thing. I have data, do the math.”
Many people make good points. Still, what does the Times have to lose? NYTimes.com visitors? Pageviews? Ad revenue that isn’t really doing them many favors anyway? Publishers get so much conflicting information, and, to be honest, are a bit doddering and confused — so they stand still. Things fall apart from there.
If newspapers keep giving away their news for free, the news will eventually stop coming. That’s not good. Look at it this way: you have to pay for news because you have to pay people to make it. When people say, “Screw newspapers. I get news on the Internet,” someone likely got paid to get that stuff written or photographed or shot.
Some people work for love and some for money, and most of us work for a combination of those things. I love journalism, but I need money to do it. If I can’t get money, I have to spend some or all of my day doing something different, and then I can definitely kiss my Pulitzer dreams and your enlightened mind goodbye. So it goes for the Times. They can’t staff the Times like volunteer firefighters. Nor can any paper. Beyond the calculations, consultants and chaos, that’s the story.
I am a European and while reading NYT I care only about 8-9 articles every week. Everyday I receive NYT headlines by mail and usually I read one or two articles put in the “top stories”. Generally speaking I think that frontpage articles have to be free. Frontpages are like shop windows. Do you want access to a newspaper on the whole? Pay it! NYT has to lose his influence in the world, that is bad news to journalism.
Rupert Murdoch, the smartest man in newspapers?
I wrote an analysis on Monday about the possibility that News Corp might take its news search results away from Google and list them on Microsoft’s Bing search engine instead. My conclusion: This one isn’t such a hot idea. Then I read John Gapper’s Financial Times item about how it *could* be a hot idea.
To recap, here’s how it would work.
- Microsoft would pay News Corp for the privilege of being the only search engine to carry results from papers including the New York Post, Wall Street Journal and Times of London.
- Microsoft thinks it can get more people to use its search engine, drawing them away from Google.
- News Corp could punish Google, in essence, for making tons of money from the ads it serves alongside news search results. Why, the thinking goes, should Google make a bunch of money off the news that we produce and our newsrooms go starving and our ad sales tank?
- Other newspaper publishers, if they see Murdoch making it work, might think the same thing and abandon Google en masse.
I and many others wrote that it would be a gamble at best. What if people don’t care that much about news? If the 70 percent of the search market that uses Google discovers the news is absent, will they switch search engines? Scientists of misanthropy like me say it’s unlikely. If they don’t find it, they won’t seek it.
Gapper at the FT has another way of looking at it:
In effect, (Murdoch) would be swapping his revenue stream from online advertising with a payment from Microsoft for drawing visitors to Bing. That suggests one of two things: either, as a lot of digital evangelists have suggested, he is getting old and does not “get” the internet, or he has looked at the figures and decided that Google traffic is not worth very much. Personally, I think the latter is more plausible. …
Mr Murdoch appears to have decided he will not lose very much by ditching Google traffic and even a fairly small payment from Microsoft would compensate. He is attempting to get distributors to pay for content in the way that US cable operators pay cable networks for programming. … If the revenue from search traffic is low, why not swap it for something else?
I hope News Ltd do this. It will clean up a lot of the so called “news” provided via Google and hurt their hits/ad revenue in the process. It’s naive to think his competitors won’t take advantage of this. Doesn’t Murdoch realise that he has devalued his own product over the years and now most of his tabloid news comes from the people and the internet – so he is the one getting content “free”. People don’t care where they get general celebrity news these days. If they want good analysis of stories they’ll go direct to specialised sites and more often than not these days they are independant web sites set up by journalists sick of the big media players. The paradigm has changed and Murdoch doesn’t still doesn’t get it. Let him cut of his own nose…
Talking with Thomson Reuters chief about print
Covering Thomson Reuters Corp for almost two years has taught me that people like to cast my company in a recurring role in media deal parlor games. Now that the company’s arch-rival Bloomberg LP will buy BusinessWeek magazine from McGraw-Hill, lots of my pals in the media world are wondering: Will Thomson Reuters buy a mainstream news or business news magazine? Or newspaper? Why not Forbes? Why not the Financial Times?
Keep in mind that Thomson Reuters likes to remind people when they ask these questions that Thomson Corp, before buying Reuters, got out of its Canadian newspaper empire for a reason. (See below)
I asked our chief executive, Tom Glocer, a question along these lines on a Thursday phone call he had with reporters to discuss the company’s third-quarter financial results.
Here is what he said:
Thomson did a remarkable job, far earlier than any other company I know, of seeing what was coming and transitioning their business out of print for the most part… I don’t see any particular time or reason at this juncture why we should go the other way.
Later on Thursday, when I interviewed Glocer, we returned to this theme. (I can’t help it, I’m a print guy.) I used the Financial Times, owned by Pearson Plc and beloved of its CEO, Dame Marjorie Scardino, as a sample target:
Here is Glocer’s reply:
SC NJ: Thanks for reading – and commenting. I did not include a quote from Glocer where he referred to PDR and similar properties. That said, I asked him about mainstream news and business newspapers and magazines, so that’s the context in which he answered the question. I don’t think you caught him out.
Robert
Financial Times: Pay to play
I stumbled across this headline on Wednesday morning:
FT Bosses Launch PR Offensive For Paid-Content Model
I thought: “Launch? Don’t you mean ‘Launched’?” The Financial Times brass has been arguing for months that the only newspapers that will survive the tough times they have been through lately are those that stop giving away the news online, and can do it without sacrificing the advertising money they earn on the Web.
Here’s an excerpt from the blog that produced that headline, courtesy of digitalarmm:
Editor Lionel Barber tells Channel 4 in an interview that there is now “an inexorable momentum behind charging for content” and he urges other national papers only considering introducing paywalls — essentially all of them — to act now (See the video link inside the digtalarmm blog post)
Here’s more:
Meanwhile Barber’s boss, FT CEO John Ridding, was busy telling Guardian.co.uk’s resident press blogger Roy Greenslade that the FT now makes one fifth of its profits from its website, compared to 17 percent in 2007.
Charging up front for content is very difficult – few papers can hold the line on quality these days. I cancelled my WSJ subscription partly because the part of their website I needed (“your portfolio”) stopped working and their support people refused to fix it; but mostly because of the racist tone of their op-ed pieces.
One suspects the real cash cow will be the first paper which dares to introduce a system of micro-payments for “Have Your Say”ers. Or even goes the whole hog and auctions off op-ed colum inches. Who knows? Drivel written rich nutters with an axe to grind may be even more entertaining what’s printed there now….
from Sean Maguire:
The raw and the crafted
The Media Standards Trust has begun a lecture series on 'Why Journalism Matters'. It is disconcerting that it feels we have to ask the question. The argument put forward by the British group's director Martin Moore is that news organisations are so preoccupied with business survival that discussion of the broader social, political and cultural function of journalism gets forgotten. It is a pertinent review then, given the icy economic blasts hitting most Anglo-Saxon media groups, and notwithstanding the recent examples of self-evidently broader journalistic 'value' produced by London's Daily Telegraph in its politican-shaming investigations into parliamentarians' expenses.
First up in the series was Lionel Barber, editor of the Financial Times, who cantered through the justifications for a vibrant, independent press. Watchdog, informer, explainer, campaigner, community builder and debater - those are the roles that journalism plays. The value that it brings is most evident by comparison with the unhealthiness of states where the press is not free, noted Barber, citing the struggles of the citizenry in China and Russia to hold their leaders to account.
The FT's USP as a media group, according to Barber, is as an explainer and analyser of complicated events that play out across a global stage. But analytical reporting of global stories costs serious cash, he noted, in a question-begging aside. That you get the quality of journalism you are prepared to pay for, ultimately, is his response to the challenge posed to mainstream media by Internet-enabled communicators. For free you can have the rawness of a blog. For crafted journalism that is properly sourced, reviewed for taste and style and checked for accuracy, you must find ways to charge. At your peril do you blur the edges between the crafted and the raw world of easy comment, hasty opinion and rumour billed as fact, argues the FT editor. (There was a hat tip, however, to the bloggers that have broken news, such as Guido Fawkes who forced the resignation of an advisor to Gordon Brown by revealing his plans for a smear email campaign.)
So a sharp distinction was drawn between the value proposition of professional journalism and its unruly blogging and twittering cousin. No such clarity yet, though, on the funding model for the former when the Internet has made audiences expect to read most general interest news and a lot of specialised niche content for free. No secret that each and every news group is daunted by this obstacle, even the FT, which has not been immune to the downturn in advertising revenue.
We were left with a couple of clues on the way forward. Barber predicted that within a year all news organisations will be charging for online content in some way. (The FT's model is to allow readers access to a few articles for free and then charge for further use.) Will Google ever pay for content - unlikely says Barber. But at least they might be prepared to talk about linking via searches to articles requiring subscription, which they do not do currently.
And his flippant response to the demographic challenge posed to a print-based news organisation by the emergence of a generation of youngsters who get all their information from screens? People are living longer - they will still buy newspapers.
Friday media highlights
Here are some of the day’s top stories in the media industry:
TV Networks Fight Drug-Ad Measure (WSJ) “Advertising costs are deductible to any company as a business expense. The plan being considered by Rep. Rangel’s Ways and Means committee would eliminate the deduction with respect to prescription drug advertising,” writes Martin Vaughan.
Big media seek 21st century business models (Reuters) “Media moguls at this week’s Sun Valley conference have spent as much time discussing how to reconfigure business models disrupted by the Web as they have worrying about the weak economy,” reports Yinka Adegoke.
Zucker Says Marketplace Has Reached Bottom (B&C) Ben Grossman writes: “NBC Universal chief Jeff Zucker said Thursday that while the overall marketplace is still challenged, he thinks it may have bottomed out. ‘It’s still quite uncertain and we don’t really see the full recovery we are all hoping for,’ he said. ’It’s still tough out there, but I think we have seen a bottom.’”
The Financial Times and New York Times make further syndication deals (Editors Weblog) “Both the Financial Times and the New York Times have announced their international syndications will include additional countries. The FT has confirmed content sharing arrangements with publications based in Turkey, France, and South Korea,” writes Christie Silk.
NBC Reveals Displeasure as U.S.O.C. Unveils Plan (NYT) Richard Sandomir writes: “The head of NBC Sports said Thursday that he broke off talks in April about combining the Olympic channel that it partly owns with the one being planned by the United States Olympic Committee.”
AP Works Toward Universal Online News Format (Mediapost) Gavin O’Malley writes: “The Associated Press, along with fellow non-profit The Media Standards Trust, on Friday unveiled a digital news “microformat” to effectively encapsulate the content and key meta-data of every news story online.”
Is your newsroom ready for the future?
On Tuesday, a panel hosted by Reuters and the Society of American Business Editors and Writers discussed the state of the media industry and the challenges it faces from consumers demanding information in new and different ways.
How could the industry transform its newsrooms to thrive in this culture?
Chrystia Freeland of the Financial Times said the key discipline was to constantly ask what the reader actually wants and not what is technologically possible. “This is going to be different for everyone,” Freeland told the crowd, which included Thomson Reuters Editor-in-Chief David Schlesinger.
For the full discussion, watch the video below.
The panel included Chrystia Freeland, US managing editor, Financial Times
Larry Ingrassia, business editor, The New York Times
Sree Sreenivasan, dean of student affairs & new media professor, Columbia Journalism School
Some 30-40 years ago I attend a newspaper conference in Houston, and among other things, we listened to a presentation from a consulting firm on reader desires. Then several minutes later two editors told the audience what the readers wanted.Maybe you’re asking the wrong people for a solution.
This result isn’t all bad news for AT&T — they can still return 5,000 jobs to the U.S. market, they can still invest in 4G LTE infrastructure, and they can certainly work on improving the quality of their customer service.
Finally, they can compete more effectively for T-Mobile customers, with a value-based offer, and thereby convince consumers that they are worthy.
Perhaps AT&T’s CEO did under-estimate the anti-Bell sentiment towards his company, but they can recover — as they’ve done in the past, from their numerous setbacks.