Monday, January 28, 2013

Dan Gillmor: We need more experiments on revenue side of media startups


Fifth in a series on entrepreneurial journalism programs at universities and media organizations. 

Dan Gillmor, Founding Director
Knight Center for Digital Media
Entrepreneurship, Arizona State U.
Dan Gillmor is recognized as an expert in new digital media, but when he teaches entrepreneurship, he has a broader vision than just media.

He sees media as one part of an entrepreneurial culture where people are creating thousands of new enterprises. He sees a society where people are participants and not just employees. "I don't think we can call ourselves literate unless we're creating stuff, not in the world we're in," he says. In other words, we are the media, and we are media-active, to play on the titles of two of his books.

He teaches at the Knight Center for Digital Media Entrepreneurship at Arizona State University. University journalism programs can play a part in creating a new media ecosystem to replace the one whose business model is collapsing, he says. But so can other university departments, training organizations, journalism nonprofits, traditional media, startups, and individuals with no credentials but with valuable experience to share. "My attitude is, the more people who want to be in the mix, the better."


Creative destruction

"There is enormous turmoil going on" in media today, Gillmor says. Traditional media are cutting coverage as they go through layoffs, bankruptcies, and closings. New media are mushrooming to replace them but often lack sustainable business models. Most will fail.

"I think it would be a mistake to assume a single kind of program would solve more than part of the problem," he says. "We need to get over the idea that one thing can solve all of those issues, the silver bullet stuff. I agree with Clay Shirky on this, that nothing by itself is going to work, but that with everything together, that's where we have a good chance.

"Universities can help students understand the financial realities that exist in media today, which is new for many of them. It can help them understand the techniques of digital media in any number of ways, and all of that should be an overlay on basic journalism principles. That would be an improvement over what journalism education has been. Giving people as much hands-on experience as possible is also a good thing. We can help them understand and not be terrified by the reality" of the current media revolution.

In the Arizona State program, he says, "I think we're bringing a lot of value by helping the students understand business, helping them understand the startup culture, on both the positive and negative sides."

The end of the monopoly

For journalists, "It was a pretty cushy gig we had when we told people what the news was, and their option was to purchase the thing we had or not, and they had no alternative but to purchase it. I'm pretty happy that that model is over. It's incredibly unhealthy."

Among the sins of the monopoly model that thrived before the Internet was a complete lack of business skills, Gillmor says. Publishers could stand back and watch the money roll in. They raised rates when they wanted, and advertisers had no alternative but to pay. Salespeople did not sell but merely answered the telephone.

Warren Buffett famously said that your idiot nephew (see p. 2 of transcript) could run a newspaper, and he was not far wrong.

"Journalists for big media companies in the latter part of the 20th century didn't know much about business and didn't talk much to the business parts of their companies," Gillmor says. "I think that was one of the dumbest things the journalism industry ever did."

As a result of that isolation from the business side, journalists who are trying to reinvent themselves online often have no idea about how to run a business, he says. Many of the university programs, including Arizona State's, try to remedy that by teaching students business skills and having them take courses in the business school.

Many will fail

Many of the university programs are built around a capstone project such as creating a new digital media product. Gillmor views this trend with skepticism. For one thing, not everyone is cut out to be an entrepreneur.

"Ambiguity is the most important word I apply to the startup process. You almost have to enjoy ambiguity to be successful in a startup. I certainly learned that it's not fun to fail, but I don't think anyone who's been in that world would dispute the learning that comes out of failing. There's nothing as clarifying as understanding what you did wrong."

Gillmor believes the idea that numerous successful product launches will come out of a classroom is unrealistic. "If we define success (in university programs) that way, I'm prepared to say that's not going to happen. But if we define it as some people trying to do things, with the occasional success mirroring the low rate of success in the startup world, I think that would be a fine outcome, as long as the students are all getting this understanding and appreciation of business that we're trying to bring into the curriculum."

Navigating the ethical issues

Journalists who start their own media organizations quickly realize that they will not be able to survive unless they get involved with advertising, marketing, sales and other subjects that may produce ethical anxiety.

To Gillmor, the idea that there used to be a Chinese wall between advertising and editorial was an illusion. "These ethical principles that apply to the journalists were never applied to the publisher. Everyone knows that lots of things never got covered because you just didn't go there in the big fat monopoly ethical days." Certain advertisers would not be written about. Certain sensitive community issues would not be covered.

"By contrast everyone working in a small newspaper was deeply exposed to the conflicts and found their ways through them. Real life is messy in every business, and I think disclosure solves a lot of the problems. In the end, audiences learn to trust from a variety of signals. I'm guessing it has much more to do with the quality of what they're seeing and reading about the topics that they know something about.

"Being ethical is crucial for journalism. If you're going to have these conflicts, the least you can do is disclose them. The church-state thing is not going to stay with us, and I've got to say that's OK with me."

(Related: J-Lab has produced an excellent publication, "Rules of the Road," in which digital entrepreneurs explain how they navigate the issues raised by conflicts between editorial and business goals.) 

Innovation in digital advertising

Gillmor's takeaway from the controversy over The Atlantic's publishing of an advertorial by the Church of Scientology content blunder was mostly about how it was presented.

It had the same look and feel as the editorial content, Gillmor says, and that was misleading. In addition it had the "mushy expression" 'Sponsor Content' at the top, he wrote in The Guardian. "Things that are labeled as advertising should be distinct in clear ways from the content that is not. When they're disguised to appear like the editorial stuff, that just seems obviously wrong. They didn't label it terribly honestly."

Advertising as content

For Gillmor, the Atlantic incident underlines the need for more innovation in advertising and revenue generation in digital media. Digital journalists give this too little attention, he believes.

He is a fan of advertising in some of the highly niched magazines he subscribes to. In many cases, he says he gets more useful information from the ads than the editorial.

"I'm not bothered by the fear and loathing in the journalism world about ads corrupting things. That's really more about journalists in existential panic over whether they really mean anything. The more experiments we see (in advertising and revenue generation), the better off we're going to be. That's what so exciting to me about this new world we're going into. We're going to see all kinds of fascinating experiments."

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