Bands Collecting Scalps
Here is a development that seems like a logical progression in onslaught against all middlemen – bands going after scalpers. We can probably expect producers of content to get testier at middlemen profiting from their efforts.
There are problems, though, for bands in their efforts to go after scalpers and middlemen services such as StubHub. Resellers of concert tickets have long been making a fortune, and have created a two-tiered concert system – the rich and well-connected paying what the market will bear by going to middlemen, and “true fans” (the younger and those with expendable time) paying in time by waiting on line or online for their face-price tickets. Because the young generally have more time than money, they dominate the second group. Bands can eliminate this two-tiered system most effectively by hiking prices to market rate. The dominant belief is that letting the market decide might work for Streisand and her fans who tend to be older and quite wealthy, but won’t work for bands with young followers and less disposable income. This dominant belief is wrong.
Letting market forces dictate ticket prices would certainly prove more lucrative for bands today who derive ever-increasing revenue from live shows as opposed to record sales. Enforcement against middlemen does not actually eliminate black market demand, but instead forces it into venues like Craig’s List, a bizarre of shadowy and often dishonest characters hawking everything from clothing and furniture to scalped tickets and prostitution. Caveat emptor. Letting the market dictate prices would largely eliminate this black market, along with the counterfeiting that goes along with black market pricing. The fear that the wealthy are going to scoop up all the tickets is real but probably unfounded for most bands. After all, how many investment bankers are going to swamp the next Severe Torture show? The economics for a band with wide, cross-cultural and generation appeal (think U2), might be different, though. A market system would presumably drive prices into the stratosphere, and with wealthier and older crowds, U2 might need a different mix of enforcement and market to achieve the right profit-demographic mix.
The real winners of this new effort? The lawyers. Because music industry lawyers are seeking to enforce the fine print on the back of tickets giving them the right to dictate resale terms, ” (A) lot of lawyers are going to make a lot of money,” says the article.
Facebook Retreats
New York Times article detailing Facebook’s response to privacy criticisms concerning Facebook’s practice of broadcasting Facebook users’ purchasers to other Facebook members. As the article details, Facebook is trying to cash in on the popularity of Facebook without damaging the popularity.
The article points out a paradox of younger internet users – many broadcast details of their own lives in an almost exhibitionist manner, but want to maintain control over what is made public, even over purchasing decisions.
Down the Memory Hole
The San Francisco Chronicle’s website SF Gate is using a sneaky new technique that threatens to change online political discourse.
Syria vs. Facebook
Syria cracks down on social networking site Facebook. (Hat tip: Drudge).
Google vs. The Telcos
Great article by Holman Jenkins in today’s Wall Street Journal regarding the emerging contours of battle between Google and Ma Bell’s progeny, whose strategy of upgrading the broadband pipes leading into homes might pay immense dividends in a streaming content world of movies-on-demand.
CJS Beauty Contest
With Thanksgiving approaching and some students already heading out of town, Columbia Journalism School paraded a series of professors in front of an auditorium of students this afternoon to entice and inform students regarding their upcoming choices for spring semester. Each professor got a few minutes to detail their classes and make a personal pitch for the assembled students to select their courses.
Most Columbia Journalism students are fulltimers in for one year only, so institutional memory of the possibilities can be found in one of only a few places – class evaluations whose written contents are specifically withheld by the administration, the hard-to-pin part-timers, and the occasional unguarded faculty member, whose motivations can range from angelic to Machiavellian. And with only this semester to choose before graduation, a group of us poured over tonight’s handouts in the dark corners of a local beer & burger joint to weigh our options. Some thoughts:
1. In addition to completing a Master’s Project, each student is required to take one six credit seminar, one six credit workshop, and one three credit elective. Tough choices all around. My New Media Master’s Project seems to lock me into a New Media Workshop – not a bad thing, but the overcrowding and on-the-fly feel to the New Media courseload has left feelings of unease among some of the concentrators, particularly with so many tried-and-true Workshop offerings for the taking.
2. Courses are selected on a balloting system – select your top three choices for each category and you will assuredly get one of your three. But with some courses historically tougher to get into than others, gamesmanship opportunities abound! For example, let’s say I want to take “Sports Journalism” with Sandy Padwe as my elective. If my heart is set here, I can select two popular courses that don’t interest me, propelling me into the course I want. Perhaps students have already been subconsciously doing this for years – there might be professors who owe their popularity to game theory! And of course, I could get stuck with my third choice.
3. I really wanted to take “Covering Religion”, but my New Media Master’s Project got in the way. The class takes a fully funded trip overseas each spring, one which overlaps with the Master’s Project deadline. Last year the class visited India, while this year they plan to go to Ireland. Pretty sweet deal, but I probably would have taken the class without the trip, alas.
4. With MIT already offering online courses, when is Columbia Journalism School going to put its money where its mouth is and offer students (and maybe more importantly, alum) the opportunity to take courses online? Several visiting graduates expressed no small amounts of envy when shown the current New Media curricula, and past students would certainly benefit from Flash training or other New Media skills easily taught online.
Kitty Steps
When I started to write this blog, I did not appreciate how much time video editing soaks up, which is a core chore in the New Media concentration here at Columbia Journalism School. And once a few days goes by, any audience that may have seen fit to follow this blog drifted away, lessening the impact (and guilt) associated with each additional day of delay.
But no more! I will post daily, even if posting something modest like this vignette, about a mistrial declared in a case where a bird watcher killed an endangered bird-stalking cat, which may or may not have been a pet. I can’t shake the feeling that this is the undercard for some dog lover vs. cat lover Armageddon. I also can’t imagine a case like this ever not ending in a mistrial, with the emotion animal lovers can bring to these issues.
All Press is Local
Walter Hussman, Publisher of the Arkansas Democrat-Gazette and scourge of free content, appeared at a luncheon on Thursday at Columbia Journalism School to push his argument that newspapers should not be in the business of giving away free content. Hussman contended that the decline in newspaper circulation has in large part been due to the media strategy of newspapers giving away their content for free. Consumers, being rational, got their news without needing to spend additional money.
Buttressing his argument with statistics from his experience of charging for content with the Democrat-Gazette, Hussman compares the success of newspapers who charge for content versus those who do not. The numbers are compelling. Expounding on his earlier column in The Wall Street Journal, Hussman made a strong case that newspapers would fail to offset revenue lost in declining print circulation with revenue generated from online visitors. Citing the Inland Cost and Revenue Study, Hussman claimed that newspapers generate between $500 and $900 in revenue per subscriber per year, versus $5 to $10 per unique visitor per year.
These numbers tell only part of the story. Hussman then compared circulation figures for the Democrat-Gazette with the Columbus Dispatch. The Columbus Dispatch and Arkansas Democrat-Gazette are the sole mainstream dailies in their respective markets, both of which are similarly-sized state capitals. The difference between the two newspapers? The Dispatch switched to a free content model on Jan. 1, 2006. In its first six months of offering free content, the Columbus Dispatch’s daily circulation declined 5.8%, compared with a loss of 0.4% daily for the Democrat-Gazette. This comparison reflects national trends for newspapers that have decided to offer their content for free. Under Hussman’s analysis, it is difficult to see why any newspaper would offer its content for free.
However, there are real world problems with Hussman’s analysis. Most notably, Hussman’s strategy seems to require either establishing a dominant market position on local news gathering (i.e., the Democrat-Gazette in Little Rock), or serving a compelling product to a niche with disposable income (i.e., The Wall Street Journal to financiers). No less a robust content provider than The New York Times felt compelled to abandon its subscription model, hemmed in by the reality that it is neither a commanding local voice nor a provider of exquisite niche content. The evidence cited by Hussman suggests two possible strategies for newspapers going forward: first, to leverage local market power on news by charging for local content, which is difficult for larger publications with a national focus to replicate successfully. Under this model, national news offered on web sites would be posted for free, as such news is easily found elsewhere. Second, if local market power is not lucrative or too difficult to attain (such as in New York City), then obtaining a special niche or specialty would be the preferred strategy, perhaps with a component of local news. If local news is niche content that people will pay for, then large city dailies without dominant market positions might consider purchasing the smaller neighborhood newspapers, establishing neighborhood dominance to leverage for paid readership. Without establishing some kind of dominant market power, a newspaper in a multi-daily metropolis would find itself compelled to offer free online content, as any price charged would be immediately undercut by its competition. And web content does earn some money for the newspaper. Just not nearly enough.
Hussman’s arguments harken back to the early days of the dotcom boom, when the conventional wisdom was to spend money to obtain dominant online market positions. Once obtained and with hard-earned goodwill, the dotcom would finally be able to earn a return on all of the capital initially invested. The logic worked out well for some (ebay and Amazon), but failed more often than not (AllAdvantage.com, anyone?). With control of the local Little Rock market and comparatively strong circulation, Hussman has found that it is good to be the last man standing.
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