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Andy Burnham calls for BBC to help save local media

Valerie | 31 Mar 2009, 13:27

UK Secretary of State for Culture, Media and Sport, Andy Burnham, has called for radical measures to safeguard the future of regional newspapers.

Speaking to the Times, Burnham added his support to the idea of public-private partnerships between the BBC and local newspapers, explaining that the corporation could provide sound and images to local newspaper websites, which in return would provide local information to the BBC, with the latter becoming “an enabling force in the media world”.

His comments follow yet more media reports of job cuts in the global publishing industry amidst falling advertising revenues, with regional newspapers hit particularly hard. Last week, The Daily Mail and General Trust warned of falling profits and has subsequently doubled the number of planned job losses – with 1,000 jobs to be cut at Northclife, the regional newspaper division.  According to Brand Republic, between 3,500-4,000 employees at regional papers in the UK, around 10 per cent of the industry’s workforce, have lost their jobs in the past six months.  In the US, the picture is similar, with job cuts recently announced by the New York Times and Washington Post as a direct response to the deepening economic recession.

Matthew Taylor, Chief Executive of the RSA proposes a novel solution in this blogpost, which picks up from the recent meeting held at 11 Downing Street to discuss Martin Bright’s “New Deal of the Mind” focusing on the arts. Taylor says:

“Why not create a national scheme to give newly redundant regional journalists, and those emerging from journalism courses with no chance of a job, start-up funds to create strong community websites.

“These sites could be of real values to local people trying to cope with the recession, generating new business and community self-help opportunities. With a small national body to support these fledgling sites and foster innovation and best practice (as is being developed by William Perrin working with UK Online Centres and Channel 4), we could see hundreds of powerful local networks in months”.

Speaking to The Guardian last week, David Simon, the creator of the popular US TV series The Wire voiced his fears that the death of local newspapers could mean an explosion of rampant corruption in American political life.  He argues that finding new business models is the only hope for major news outlets and that they must ‘find a way to ‘collaboratively impose charges for reading online, and to demand fees from aggregators such as Google News, which profit from their journalism.’ Summing up the recent debate on ‘Freemium’, he said:

“If you don’t have a product that you’re charging for, you don’t have a product. If you think that free is going to produce something that’s as much of a cost centre as good journalism – because it costs money to do good journalism – you’re out of your mind.“

New media guru Clay Shirky echoes this sentiment, adding:
“Journalism will not die, but it will undergo a painful process of re-imagination”.

The House of Commons Culture, Media and Sport Committee has launched an inquiry into the future of local media that will consider issues surrounding the impact of digital, the effect of news aggregators such as Google, and the extent of plurality required in local media markets.

Obama administration sides with RIAA in P2P lawsuit

Valerie | 27 Mar 2009, 09:42

As the verdict on the landmark trial of Pirate Bay creators fast approaches, a Wired editorial reports that the Obama administration has voiced its support for the recording industry by defending the copyright laws being used by the Recording Industry Association of America (RIAA) in a file-sharing lawsuit against a Boston University graduate student, Joel Tannenbaum.

According to US copyright law, violators can be sued for damages ranging from $750 to $150,000 per infringement. Tenenbaum is being sued for $1 million for allegedly illegally sharing seven songs online.

The news comes as several countries around the world are cracking down on illegal file-sharers with a “three strikes, you’re out” policy. In France, the government is supporting an amendment to an draft EU bill for strengthening security and fundamental freedoms on the Internet whilst in New Zealand,  a new copyright law says an Internet service provider (ISP) must adopt and apply a policy that allows for Internet access to be terminated “in appropriate circumstances” for repeat infringers.

FoxNews.com focuses on the central issue highlighted by these cases:

“... in a day and age when Internet access is almost as essential as a cell phone or electricity, should the music industry or ISPs have the power to determine who can and can’t get online, particularly without criminal charges being filed? And what if there’s no legal recourse for the customer?”

Whilst The Register notes that the group of law students mentored by Professor Charles Nesson of Harvard Law are not focusing his defense around whether he illegally downloaded those seven tunes or even if copyright law is right, they are arguing against “unconstitutionally heavy-handed damages” allowed by the Digital Theft Deterrence and Copyright Damages Improvement Act of 1999, which allows up to $150,000 (£103,000) in damages to be assessed for each “willful” violation of copyright.

A ruling on the Tenenbaum case is expected around March 30th.

Twitter one step closer to viable business model

Valerie | 26 Mar 2009, 16:06

Twitter, the microblogging social media platform, has launched a web site sponsored by Microsoft Corp. called “ExecTweets”. 

The site aims to “aggregate the tweets of top business execs and empower the community to surface the most insightful, business-related tweets”.  Contributors include executives at major global companies and organisations, including Coca-Cola, Uniliver and the Lance Armstrong Foundation, allowing those executives to talk directly to millions of Twitter users.

Founded in 2006, Twitter has more than five million users, making it the third most popular social networking site after Facebook and MySpace.  In recent months, the focus of much media and analyst speculation and interest has been on how social media sites can develop commercially viable business models.  This was also the subject of a recent blog post Monetising content - end of the free lunch in which we discussed the ‘Freemium’ model posed by Chris Long at Wired as the way forward for Web 2.0 companies. According to the WSJ.com, whilst professional networks like LinkedIn have built a business model by selling user data to recruitment firms, purely social networks like Facebook and MySpace have struggled, particularly as growth in display advertising has declined as a result of the recession.

Online analysts have already observed that although hardly revolutionary, Exec Tweets throws open the doors to monetisation, enabling Twitter to make money from advertising the service. Brands meanwhile will be looking to use the wealth of data on Twitter to provide valuable services in the future.  Suggestions also abound that Twitter could drive revenues by giving users the opportunity to pay to appear in the ‘suggested followers’ box, with a high probability Twitter could sell a premium version of its service to companies as a marketing tool, or that it may even wind up charging consumers for access to its platform.

Race to invent the next Wii

Valerie | 25 Mar 2009, 16:18

A recent article published by The Times – entitled We British must invent the next Wii draws attention to an extremely timely issue. What will happen to innovation and entrepreneurship in these times of recession? Perhaps the question should not be whether the British will invent the next Wii but how can we can foster innovation and create an environment in which creativity can continue to flourish – on a global scale.

Innovation is driven by ideas and the global creative industries are the lifeblood of inventiveness and the production of new ideas.  In Britain, 78% of creative firms are active innovators, whilst creative firms attribute 52% of their turnover to new or improved products, compared with 40% for firms in other sectors.  The challenge is to help the creative industries become even more innovative through continued incentivisation, investment and importantly, through facilitating a culture of open innovation and collaboration.

HP recently talked about its open innovation culture, acknowledging that innovation doesn’t happen in isolation but through collaboration with universities, government and other industry players:

“We want to tap into the best ideas from around the globe and to bring those ideas to market faster” said Rich Friedrich, director of the Open Innovation office.

The entire innovation value chain needs to be supported, from unlocking creative talent to converting ideas into commercial success.  Today, Ambassadors for the European Year of Creativity and Innovation 2009 are meeting in Brussels to create a Manifesto for Creativity and Innovation in Europe”.  This follows unanimous consensus that investment in education and in the skills and creative capacity of Europe should be the top priority of EU institutions and governments.  Importantly, it also acknowledges that it would be a fundamental mistake to cut spending on research and development and education in the context of the current economic climate:

“Creativity and innovation are tools to tackle Europe´s challenges, including the move to the knowledge society, demographic change, globalisation and climate change.”

The onus should be on continued investment in innovation and creativity precisely because of the recession.  A McKinsey article published last month acknowledges the importance of ‘building an innovation nation’ as an important competitive differentiator in times of economic turbulence. Partnering with the World Economic Forum, it has produced an “Innovation Heat Map,” by identifying factors that are common to successful innovation hubs – including infrastructure, demand, government regulation, human capital and business environment.

This week also saw the launch of the world’s least expensive car, the Tata Nano – welcomed on the whole as a triumph of Indian design innovation and was a particularly well timed announcement. Meanwhile the New York Times reports on a Boston-based venture capital firm that is looking to capitalise on the downturn as an opportunity to find fresh ideas – by creating a grant for early-stage web companies. These are just some examples of how creativity can flourish at a time of intense need – perhaps just the stimulation that Britain – or indeed any other country needs to spark a new idea that could lead to the next Wii.

Monetising content - end of the free lunch?

Nick | 24 Mar 2009, 14:10

An article in The Economist has re-ignited the debate on monetising digital content by casting its verdict on Web 2.0’s free model.

Entitled The end of the free lunch—again, The Economist argues:

“In recent years, consumers have become used to feasting on online freebies of all sorts: news, share quotes, music, email and even speedy internet access. These days, however, dotcoms are not making news with yet more free offerings, but with layoffs and with announcements that they are to start charging for their services. These words appeared in The Economist in April 2001, but they’re just as applicable today.”

Examining the rise of the businesses that sprang up during the first dotcom bubble and the subsequent re-emergence of Web 2.0 firms giving away content in the hope that advertising revenue would materialise later, the article acknowledges that the “power of free” has clearly been compelling to all and concludes that the demise of a popular but unsustainable business model (of free content) now seems inevitable.  As the Evening Standard points out:

“The business of free depends chiefly on advertising and the problem is that revenues have abruptly stalled because of the recession.”

The question of how to monetize content has never been more pertinent and was a key talking point at the recent MediaGuardian Changing Media Summit.  As the newspaper industry faces its biggest crisis in a climate of falling revenues, The Independent and The Times have both recently announced they are considering introducing paid-for content on their websites. The concept of micropayments, one solution that has been put forward, has not proven popular so far. The New York Times website – one the most popular news sites in the world –is a famous example of one publisher that withdrew its subscription model for access to online content.

Chris Anderson, editor-in-chief of Wired and author of The Long Tail believes the answer may lie in pursuing a hybrid model of free and premium content. The ‘Freemium’ model posed by Anderson is an inversion of the old free sample model - instead of giving away a few physical samples to attract customers, a company gives away its basic service to everyone for free and then charges a fee for an upgraded or premium version.

The question of whether the concept of free is still relevant, particularly in this tough economic environment is an important one.  As the Evening Standard notes, going free will inevitably mean driving up revenue from another source.  Paidcontent.com sums up this position well:

“The psychological and economic case for it (free) remains as good as ever—the marginal cost of anything digital falls by 50 percent every year, making pricing a race to the bottom, and ‘Free’ has as much power over the consumer psyche as ever. But it does mean that Free is not enough. It also has to be matched with Paid.”

Andy Burnham, Kate Nash and Feargal Sharkey in conversation

Andrew | 22 Mar 2009, 10:11

Guest blog: Feargal Sharkey, CEO of UK Music, who represent the UK’s commercial music industry

Creators must be heard to make a difference

I recently chaired a conversation between Secretary of State Andy Burnham and the musician Kate Nash, who was representing the Featured Artists Coalition (FAC). You can download a podcast or transcript of the conversation from this page.

Writing as a former artist, I know as well as anyone that creators’ voices have often been conspicuous by their absence in music industry debates.

Clearly this is not right. The past decade has seen huge upheaval in how the music industry operates; but without creative talent, there simply is no industry.

It was for this reason that one of UK Music’s first initiatives was to announce the world’s first Creators’ Conference – with the idea of bringing together a diverse range of around 100 UK artists, songwriters, composers and musicians, and allowing them a private, free and direct dialogue with both Andy and the European Commissioner for the Internal Market, Charlie McCreevy.

Two months later, the event took place on 11 December 2008 in Central London.

Music-makers expressed their opinions on anything from file-sharing and copyright to Top Of The Pops; while Andy and Charlie had an opportunity to explain how creativity is now a key driver of the UK and European economies, and how politicians’ actions can make a real difference to those who make a living through music.

As a first step, I think the Creators’ Conference was an incredible success.

Indeed, fast-forward three months, and, in addition to songwriter/composer and musician representative bodies (BASCA, and the Musicians’ Union) in the shape of the Featured Artists Coalition there is now an organisation established specifically to provide a voice for contracted artists

As a member of FAC’s steering group, Kate, along with the likes of Billy Bragg, Dave Rowntree and Ed O’Brien has been a key figure in the new organisation’s creation, and this podcast builds on a conversation first initiated with Andy back in December.

I think it is vital, welcome and overdue dialogue. And one that UK Music will do all it can to facilitate and develop in the months and years ahead.