The irrational imitation of the online news industry
All across Europe, journalistic online startups are launching, aiming to produce and disseminate news in new ways. In our brave new world, the nimble startups of tomorrow were supposed to be overtaking the lumbering dinosaurs of yesterday online. But nearly all of these startups, even the most impressive and innovative sites, are struggling to survive because they face structural and strategic challenges that are not always recognized upfront. To succeed, European journalistic startups need to recognize these challenges, move beyond simply imitating others and find their own paths ahead.
The structural challenges for European journalistic startups have to do with the competition they face in content and advertising.
Startups are trying to establish themselves in a market for online news that is dominated by legacy media like newspapers and broadcasters. New journalistic ventures, such as Netzeitung, Rue89 and Il Post, are competing not only with other startups but also with the popular online offerings of news organizations like Spiegel, Le Monde and La Reppublica. These incumbents, and others like them, have built their digital strategy around their well-known brands and content from their existing newsrooms. They fund them with profits from their (generally declining) offline operations. Together with a handful of aggregators and portals, such legacy players dominate online news provision in most European countries.
As European news startups compete with established news media on the content side, they are also trying to carve out a position in a market for online advertising. That market is already dominated by U.S.-based giants like Google (and increasingly Facebook). A few large players attract most of the advertising, while innumerable smaller websites with display advertising keep down rates (so-called CPMs, cost per thousand impressions), eroding the value of the audience that each journalistic venture manages to attract.
Those are the structural challenges. The strategic challenges, meanwhile, concern the tendency toward irrational imitation. Startups across Europe need to break with two kinds of imitation in particular to develop sustainable funding models for the future.
On the one hand, many startups imitate what has been the dominant model for online news for the last 20 years. They produce content, make it available to users for free and try to cover costs by placing advertisements on their site. This doesn’t work. News that is free at the point of consumption has worked for broadcast television, radio and for-free newspapers for decades. But because of the structural challenges of online advertising outlined above, the model is not working on the Internet. Most sites operating on this basis are operating at a loss, and have done so for years. It is not clear that the dynamics of online news and online advertising are likely to change anytime soon, so to launch a site based on this model expecting to break even is a clear case of irrational imitation – doing the same thing, hoping for a different outcome.
Cisco tries to free up internet traffic jam
There is nothing more infuriating than a slow mobile connection. With people bringing their own devices to workand everywhere else, wireless networks will be working hard to accommodate the mobile traffic flood.
Here’s where Cisco comes in: On Tuesday, it unveiled a wireless access point called the Aironet 3600 Series, which can increase the speed of connection by up to 30 percent on any kind of mobile device no matter how weak or strong the network is.
According to Cisco, it is the first company to offer access points with four antennas and three spatial streams. What does it mean? Essentially more people have more range to use their devices, even if there is more traffic.
The device make changing lanes on the wireless freeway easier so your device can find a faster lane and congestion never gets very dense.
But it isn’t cheap–$1,495 for an internal Aironet 3600 and $1,595 for an outdoor one. .
Cisco said customers would likely be health-care providers, banks, hotels, universities or airports. It said the University of South Florida, the country’s 9th largest university, is a already customer as is Germany’s Technical University of Darmstadt. Cisco has hawking wireless access points for a while and between 2000 and the end of October, it has sold some 11.7 million units. Cisco likes to point out that is more than the 10.4 million albums Britney Spears has sold in that time. Photo: Reuters
SOPA, the Internet, and the benefits of a mutual enemy
That giant sucking sound you hear is the life being drained from SOPA and PIPA.
In an astonishingly effective campaign, a number of prominent websites decided on Jan. 18 to act as though they were being censored. SOPA — the House Stop Online Piracy Act , and PIPA, the Senate’s Protect IP Act — would, in fact, have little or no impact on U.S. sites but the message was clear: The Net is one seamless organism. An attack on my friend, or even my enemy, is an attack on me.
The big players that made a big show of support for the anti-SOPA/PIPA cause included Wikipedia, which completely shut down its U.S. site, and reddit.com and wired.com (I work for the latter, and both are owned by Condé Nast).
Some big players did not get involved in the protest, including Twitter (which even belittled Wikipedia’s demonstration as “silly”) and Facebook.
Google, a vocal opponent, redacted its name on Google.com but did permit searches. (Again, in the interest of full disclosure, Google sponsored the redacted wired.com homepage illustrated above.)
But the fact that arguably many of the biggest names in the internet business didn’t participate much or at all in the “blackout” makes it all the more fascinating that nearly 20 senators – and now all four remaining Republican presidential aspirants — now suddenly say they are against it. Friday morning Senate Majority Leader Harry Reid said he was delaying a scheduled vote on PIPA.
@DmitryGaranin I agree. Which makes hunting them down and punishing them pointless, one might thus argue. And further argue that any bill which threatens innocent bystanders in a futile attempt to punish incorrigibles is dangerous. Having said that, protecting IP is a no brainer. You just need more brains than were deployed to craft SOPA & PIPA to get it right.
Tech wrap: Yahoo to cut Asian stake
Yahoo is considering a plan to unload most of its prized Asian assets in a complex deal valued at roughly $17 billion, sources familiar with the matter said.
The former Internet powerhouse’s increasing difficulty in competing with heavyweights such as Google and Facebook have forced it to explore proposals to revamp its business.
Weakening economies and falling prices of rival smartphones are hurting sales of Apple iPhones across Europe, data from research firm Kantar Worldpanel ComTech showed on Thursday.
The October roll-out of Apple’s iPhone 4S boosted its position in Britain and United States, but the new phones failed to excite interest in continental Europe, where Apple’s share of the fast-growing smartphone market slipped.
Staying with Apple, a German court rejected the company’s claims that Samsung Electronics’ reworked tablet PC still looks like a copycat version of the iPad, in a preliminary assessment.
Apple is fighting several rival makers of smartphones and tablet PCs in courts worldwide over intellectual property.
Bloomberg reports that Funny Or Die, the comedy website founded by Will Ferrell, is pointing the way for Web-based entertainment companies by combining the scrappiness of an Internet startup with A-list talent that attracts viewers.
And the Grammy goes to — Steve Jobs!
First it was a bronze statue in Hungary. Now it’s a Grammy.
The accolades for the technology icon who died Oct 5 are still pouring in.
While Jobs is not a musician, his influence on the music industry — good or bad — cannot be denied. And for this, the National Academy of Recording Arts and Sciences is giving the co-founder of Apple Inc a Grammy at an invitation-only ceremony on Feb 11.
A formal acknowledgment of his Grammy — part of the 2012 Special Merit Award — will be made during the regular 54th annual Grammy Awards, to be held on Feb 12 at LA’s Staples Center.
“As former CEO and co-founder of Apple, Steve Jobs helped create products and technology that transformed the way we consume music, TV, movies, and books,” the academy said in a statement. ”A creative visionary, Jobs’ innovations such as the iPod and its counterpart, the online iTunes store, revolutionized the industry and how music was distributed and purchased.”
In 2002, Apple was a recipient of a technical Grammy award for contributions of outstanding technical significance to the recording field.
Honored alongside Jobs were other industry luminaries including musician and composer Dave Bartholomew, and recording engineer Rudy Van Gelder.
I had always suspected that a Grammy was meaningless….this confirms it.
Google’s Brin, wife donate $500,000 to keep Wikipedia going
Very few have missed Wikipedia co-founder Jimmy Wales’ picture looming on all of the pages of the user-generated information website.
But that may soon go away, thanks to Google co-founder Sergey Brin and his wife Anne Wojcicki.
The duo donated $500,000 to the non-profit Wikimedia Foundation, which runs Wikipedia and its sister sites, through their Brin Wojcicki Foundation.
The popular website had kicked off its annual fundraiser this week with Wales appealing to its readers to donate toward the costs of servers, bandwidth, maintenance, development and employee salaries. His argument — donate to keep the site free of ads and other commerce.
“This is how Wikipedia works: people use it, they like it, and so they help pay for it, to keep it freely available for themselves and for everyone around the world,” said Sue Gardner, executive director of the Wikimedia Foundation, thanking Brin and Wojcicki for the support.
The foundation has already raised about $725,000 with $275,000 left to meet their goal, according to the website.
Another big donor and Wales’ picture will disappear until next year. Anyone up?
Yeah, because ads are so much more annoying than Jimmy’s face plastered on every page. Begging for money is more primitive than commerce. He should search his site for “Market”.
Tech wrap: Blockbuster 2.0 – now streaming movies
There’s a new video streaming service on the block and it comes courtesy of an old, familiar name – Blockbuster. Blockbuster unveiled the video streaming service to subscribers of satellite provider Dish Network, which now owns Blockbuster, in a move to better compete against video rental giant Netflix and to lure customers from rival cable and satellite TV providers. Non-Dish subscribers will have to wait until Blockbuster launches a broader online streaming plan later this year, the company’s president told Reuters.
Called Blockbuster Movie Pass, the subscription service will start at $10 a month and includes DVD rentals by mail and at the company’s more than 1,500 stores. The service will offer up a selection of more than 3,000 movies streamed to televisions and 4,000 movies streamed to computers. The mail and store rentals include video games. Mail plus streaming with Netflix starts at about $16 a month. Will Blockbuster’s service be enough to threaten Netflix? Not a chance, argues CNET’s Roger Cheng. “Essentially, it’s a souped up Dish package,” writes Cheng. ” We were looking for something radically different from Dish, but we got an incremental new service plan instead.”
Amazon’s long-awaited tablet could be on its way soon. At least that’s the speculation that began floating around tech circles on Friday after the company announced plans to hold a press conference next Wednesday. Amazon declined to provide further details, but analysts were confident that the world’s largest Internet retailer will introduce its long-awaited tablet computer this year to expand in mobile commerce and sell more digital goods and services.
In other Amazon news, the company won another round in the patent fight over its “one-click” purchasing system as an appeals court ruled on Friday that it did not infringe technology patented by Cordance Corp. Separately, a peace treaty between California’s government and Amazon became official on Friday with Governor Jerry Brown’s signature on legislation striking a compromise between the two sides on taxing online sales.
Groupon’s chief operating officer is leaving to join Google five months after joining the company, and ahead of a highly-anticipated initial public offering. Groupon said on its official blog on Friday that Margo Georgiadis was leaving the daily deals company to take a job as President of Google’s Americas business.
Tech wrap: HP shake-up?
A change could be underway at the top at Hewlett-Packard. The company’s board convened on Wednesday to discuss the possibility of ousting CEO Leo Apotheker after less than a year on the job and may appoint former eBay chief Meg Whitman to fill in as interim CEO, a source familiar with the matter told Reuters. HP’s board of directors has come under increasing pressure in recent months after a raft of controversial decisions has left investors uncertain of the company’s leadership.
Newly minted Apple CEO Tim Cook will try his hand as star presenter at an October 4 company event widely expected to include the launch of the latest version of the tech behemoth’s iPhone handset, according to a report on AllThingD. Sources told the website that the plan is to make the iPhone 5 available to consumers within weeks of the event. Apple has yet to officially announce or even acknowledge that the new device exists at all. For those tired of yet another story about a rumored release date, there was something akin to a confirmation on Wednesday from an unlikely source: former U.S. Vice President Al Gore. Gore, an Apple board member, apparently told a tech conference that the next-generation phone will indeed be available next month. Oops?!
Google Executive Chairman Eric Schmidt traveled to Washington on Wednesday to face critics who say his company has become a dominant and potentially anti-competitive force on the Internet. Schmidt told a Senate antitrust hearing that his company has not “cooked” its search results to favor its own products and listings, despite accusations to the contrary from senators and other Web companies. “Google is in a position to determine who will succeed and who will fail on the Internet,” said Republican Senator Mike Lee, a member of the Senate Judiciary Committee’s antitrust panel. Google has been broadly accused of using its clout in the search market to stomp rivals as it moves into related businesses, like travel search.
Dust your library cards off, Kindle users. Amazon announced on Wednesday its Kindle ebooks will now be available for borrowing from more than 11,000 libraries across the U.S. Borrowing a book seems pretty simple: customers find the book they want on their local library’s website and choose the “Send to Kindle” option, which will then redirect them to Amazon.com where they must log in to complete the check out. Amazon then gives customers the option of delivering the book wirelessly to their device of choice – the books are compatible with all Kindle models and mobile apps – or transferring it manually using a USB drive.
Netflix and Discovery Communications reached an agreement to bring episodes of popular TV adventure shows including “Man vs. Wild” and “River Monsters” to the streaming service, the companies confirmed to Reuters correspondent Paul Thomasch on Wednesday. The two-year deal covers only material from prior seasons of the TV shows and is limited to Netflix subscribers in the United States. Discovery has an option for a third year.
Tech wrap: Google+ now open to the masses
Google has opened up its Google+ social network to anyone who’d like to give it a whirl, after a successful three-month run as an invite-only service. The company also rolled out a slew of new features for Google+, including integration of its flagship search engine into the platform, and expanded its Hangouts video-chatting feature to enable mobile use on its own Android-based smartphones. Support for Hangouts on Apple’s iOS mobile software is “coming soon”, Google promised in a blog post. Users will soon have the option to broadcast their Hangouts sessions beyond the nine allowed participants as well by opening them up to live viewing by anyone. Want to record a chat for posterity? Well, that’s coming soon too.
Google+ rival Facebook also unveiled new tweaks to its service on Tuesday, introducing a new “ticker” on its users’ home pages and providing real-time notifications of what friends are doing on the service. Facebook also revamped the service’s main news feed to flag important items — such as a new baby announcement — for Facebook users who have not logged on for a few days. Facebook also changed the way photos are displayed on the site, increasing the size of pictures that appear in a users’ news feed.
U.S. prosecutors accused poker website Full Tilt Poker on Tuesday of running a Ponzi scheme in which the company’s owners and board members paid themselves nearly half a billion dollars while defrauding players. That indictment accused three Internet poker companies — Full Tilt Poker, Absolute Poker and PokerStars — and 11 people, including Full Tilt director Raymond Bitar, of bank fraud, illegal gambling and money laundering offenses. Read the complaint in full here.
Oracle posted quarterly revenue slightly above Wall Street expectations, defying a weak outlook for global technology spending. New software sales, a gauge of future profit because they generate high-margin long-term service contracts, rose 17 percent compared with analysts’ expectations for 15 percent.
Whither the AT&T/T-Mobile merger? In a new analysis, Reuters correspondents Sinead Carew and Nicola Leske argue that “If AT&T fails to convince U.S. regulators that its proposed purchase of Deutsche Telekom AG’s T-Mobile USA should go ahead, the pair may end up having to settle for a lesser relationship.”
from The Great Debate UK:
Heavy traffic on the information superhighway
-- Jeff Smith is Senior Director Infrastructure Services, Global Crossing EMEA. The opinions expressed are his own.--
For many years now, number crunchers have obsessed over the growth of data, marvelling at the way that the computer age has generated enormous amounts of content and IT types have speculated as to how disks, tapes and other storage devices would need to evolve to accommodate this. Now, however, the problem has spread and the new fear is greater: could the digitisation of the world’s information lead to catastrophic communications breakdown?
Consider this head-spinning set of numbers. According to EMC, the data created in 2010 would be 1.2 zettabytes, the equivalent of 75 billion 16GB iPads, filling Wembley Stadium 41 times. And in the age of the Internet a lot of that data doesn’t just reside on physical media but instead gets repeatedly shunted around the globe. On mobile networks alone, 8,000 petabytes will be sent in 2011, says a May 2011 report by ABI Research, and that figure is set to grow by about 50 per cent annually for the next five years. Overall, IP traffic will grow to 767 exabytes in 2014, according to Cisco. A petabyte is over one million gigabytes and an exabyte is 1,000 petabytes.
This data growth is part of a broader picture of non-stop innovation that characterises the technology sector. The situation is exacerbated by the ease with which files can be exchanged using social networks, email, instant messaging and other systems.
However, there’s no need for panic and despair and it’s worth remembering that concerns over the Internets ability to withstand wave after wave of demand are nothing new. The Lawrence Berkeley National Laboratory newsletter reported that in October 1986 the net suffered a “congestion collapse” and “slowed to the pace of the telegraph” with emails taking a day to deliver. This was in spite of the fact that at the time it hosted only about 10,000 users sending data at up to 56 kilobits per second.
Even legends of the industry are not immune to spurious predictions of an apocalyptic meltdown. One of the founders of computer networking, Bob Metcalfe, once predicted in a magazine column that the Internet would “go spectacularly supernova and in 1996 catastrophically collapse”. Metcalfe had the self-deprecating grace to later blend that article and eat it in front of an audience. The scares have continued with think tank the Internet Innovation Alliance predicting Internet brownouts by 2012.
Certainly it’s true that additional network capacity is taken instantly, as soon as it is available, but there are many causes for optimism. Content delivery networks have proven effective ways to organise the Internets traffic by storing data where it is needed so that it does not have to take the long way around. ‘Fatter pipes’ (faster networks capable of carrying more data, faster) and sub-sea links have given us all more breathing space while compression techniques crunch data more effectively than ever and private networks offer back roads that take the weight off the main information thoroughfares.
