Mark Day, Richard Freudenstein, a little ABC bashing, and exciting news of product from the skunk works

(Above: first man to read the news on ABC TV, from a fairly feeble photo gallery and history of the ABC here).

Not so long ago, MySpace was the most popular social networking site in the United States. Then in 2008 - based on monthly unique visitors - Facebook took over, and it's been downhill ever since.

Oh and this happened after MySpace was taken over by News Corp - in the form of its digital wing Fox Interactive - and dropped 30% of its workforce in June, along with producing a substantial hit to News Corp's bottom line (and now it's carelessly lost its co-founder and CTO).

Meantime Facebook is struggling, at least in terms of getting the red ink out of the bottom line, while Google is still losing money on YouTube, and worried that it might have hit middle aged, and be picked off by some new smart punk on the intertubes block.

Can MySpace be saved and find a home on the cruel intertubes, and somehow return to being the fresh-faced lively, novel proto-Twitter it once was?

Unlikely if you remember the first internet boom, and the absurd prices paid for sites and business models which simply didn't stack up. Who can forget the wonders of GeoCities, now a ghost in the machine, or Hotmail, or Boo.com, or any of a dozen other shells you might still catch glimpses of if you roam the darker caverns on the web (for a quick guide, wiki here).

There's a sucker born every minute in the real world, but as usual on the more rapidly paced world of digital bubbles, there's a sucker born every second.

Which is why it's so touching to read Mark Day in Time for a content reality check.

One vital element has been missing from the will-they-or-won’t-they-pay debate about online news services: No one has yet defined the product.

Well good luck with that, but the rule about product on the intertubes is that a business cycle tends to be short-lived, as exemplified in the slowing up of a brand like Second Life or the vicissitudes of AOL.

It really will need to be a revolutionary concept, so what's cooking in News Corp?

It is myopic and fanciful to believe the public will be asked to pay for news sites as they exist now. That would be a recipe for rejection. What is in development is an entirely new approach to online masthead-branded newspaper sites. They’ll be more akin to social networks, a hybrid of news, services, commerce, information and entertainment designed for like-minded people or communities. This is nothing less than the reinvention of the typical masthead site—one that offers value to users and multiple revenue streams to their owners.

Um, like MySpace?

But at least it's good to know that News Corp is now calling off its war with the ABC and the BBC:

The ABC’s managing director, Mark Scott, devoted his A.N. Smith Memorial Lecture last week to an analysis of online growth—where we’ve come from, where we are and where we’re going. The key element, widely reported, centred on his promise that the ABC sites would always be free; a point he contrasted with plans by News Corporation chairman Rupert Murdoch (proprietor of The Australian) to introduce charges to many of his masthead sites around the world.

There is much to agree with in Scott’s speech. His analysis of the past decade and a half of the digital revolution, and his hardly blinding insight that the key to any media-related product is content, are common ground.

But Scott falls into the trap of most commentators. He assumes that the Murdoch plan is simply to put a pay wall around some of his newspapers’ most valuable content. Scott argues that this plan will not work, in part because sites such as the ABC’s will be free. A survey released last week by the media rating company Nielsen follows this theme. From data that indicates a lack of brand loyalty online comes the conclusion that Australians will reject paid sites. That’s probably true—as the sites now exist.

Well that's a relief. In the new world of super duper razzle dazzle, we'll be led like mice in a trance to consume the new and wondrous Kool-aid offered up by Chairman Rupert and his minions. We won't feel the need to retreat to the free world of the ABC. No more war, only peace, a piece of your wallet, a piece of my purse, a piece of their bank account.

Oops, spoke too soon. Because I went off and read Richard Freudenstein's Chief's talk of 'free content' on ABC is inaccurate, and I was back in the land of the endless tirade against the ABC.

Phew, that's a relief. There I was thinking he'd be celebrating his brand new business model and his excellent digital content, certain to make 'free' seem like an old fashioned concept only suited to hippies and geeks. Nope, it's that bloody misguided laughable ABC at work again.

Let us count the ways of being outraged:

First, as the head of a company that takes in excess of $800million every year from Australian taxpayers, his claim that the ABC's online news content "will certainly be free" is as laughable as it is disingenuous.

Similarly, he has some gall to criticise the "old proprietorial model", which he says "operated as a form of protection from harsh realities the businesses might otherwise have faced", since this precisely describes the ABC's government-owned model.

He then railed against Rupert Murdoch's "demands" that people start paying for content, presumably hoping his audience would overlook the fact that it is the ABC that gives people no choice whether to pay or not.

To top it off, he inferred that News's success has been built on a lack of competition and choice. This is a bizarre comment, given some of News's greatest successes -- Sky in Britain and the Fox Network in the US, to name but two -- have come in the face of the toughest competition around: in these examples, the BBC, ITV, ABC, NBC and CBS.

Coming from someone who is exempt from competition, this is a particularly egregious argument. Mark speaks from a rare and privileged position. Guaranteed his annual $800m-plus taxpayer income, he can operate with little concern to what his audience actually wants.

He takes the money and decides what to give back, which more often than not is targeted to a very narrow section of society.

Yes, the chardonnay sipping latte swigging cardigan wearers who infest the inner west, unless they happen to be doctors' wives or listen to the Country Hour while driving a tractor on the farm. How totally unfair this is!

Meanwhile, commercial operators such as News live or die by the value of their content. Unlike the ABC's content, which Australians have to pay for whether they want it or not, people can choose whether or not to purchase our content.

Shielded as he is from this commercial reality, Mark does not understand that advertising alone can't support the growth of online journalism. Every single commercial news publisher in the world is facing this reality, and as such something has to change.

Something has to change. And we don't know what it is, or what the product might be, but there's a revolution a coming:

Charging for a product, even when there is a free alternative, is not a radical or outrageous proposition. If your content has real value, and you deliver it in the time, place and manner people want, then it is not unreasonable to ask them to pay for it. From the research undertaken by News and other organisations across the world, there is every indication that the general public understands and agrees with this.

By all means, ask away. Charge away. Perhaps charge into the same valley in which the Light Brigade rode?

But can we just put aside the sanctimonious humbug that seems to have become a part of the process, including the relentless ABC and BBC bashing? No we can't:

Quality journalism comes at a price. Although they play a key role in the digital age, even the best-intentioned citizen journalists and bloggers cannot provide the same service. Journalism is not a commodity, as Mark thinks it is.

He says it's just about news, but journalism is so much more. It is analysis, judgment and comment. Its value must be recognised. I wonder how the ABC's numerous fine journalists feel when they hear their boss saying their work only warrants being given away free?

Oh puh-lease. Only warrants being given away free? So what do we make of that indigestible stew of crap called Mx which is given away for free to rot the brains of commuters who mistake the scribbles with the more correct use as cocky cage liner?

For those of us who actually have to earn our keep, we have to make a compelling enough case to the public that what we have to offer is worth paying for.

So stop the whining and the moaning and the whinging and make the case. Show us the product.

This is not new to News -- it applies equally online as it does to our newspapers, magazines, movies, books and subscription TV packages. News has built its business by being customer-focused, continuing to innovate and evolve, engaging with its audience and providing information and entertainment that our customers are willing to pay for.

Good, great, so start charging. Customer focused, evolving and innovative and engaging and providing and willing and caring - oh just give us some money - and seeking to draw Don Watson's attention so he can find another example of business speak for his next book.

But can we just leave the BBC and the ABC alone to do what they've been doing for decades for their small group of loyal customers? After all, from the plans being incubated in News Corp, it sounds like a new Twitter and a bunch of Twits is about to be born. Even better than The Punch, Australia's most cheap assed conversation, where they don't pay the bloody contributors, the bloody tight asses.

Contrary to what some might think, News fully recognises the scale of the challenge. We know our business has to evolve, but we have been constantly evolving throughout our history.

Does anyone want the sole provider of news to be a state-owned organisation? I am not attacking the ABC's content or its right to exist, simply advocating a plurality of independent voices, which I believe Australians deserve. But if those voices are to survive, let alone thrive, they must be justly recompensed for the expense of creating their content.

Actually Chairman Rupert and his son have been attacking the BBC (and indirectly the ABC) and its free content and its right to exist, and therefore undercut News Corp's attempts to cut our purses and make away with some of our coins (or perhaps even our notes).

As for justly recompensed - no, that's not how it works for free marketers. You make a product, and people pay for it or they don't, and you'd better make sure your budget matches what people are willing to pay. Or you start losing squillions. Just like MySpace when it alienated its customer base thanks to News Corp changes that wanted to milk more from the golden goose, and ended up cooking it.

So how will they do it? Well here we go back to Mark Day:

But who says that’s what will be on offer? Around the world, in London, New York, Los Angeles and Sydney, News Corporation teams are working up new product concepts. In Sydney, a special skunk works has been established, codenamed 2011, to rethink what News does, and how it does it. This project goes beyond simple web redesign, and is top secret. People in the know trot out the old line: “If I told you, I’d have to kill you.”

I am not part of these think tanks and by dint of the fact that I’m still alive, I have not been briefed about the processes. But I gather the aim is to create sites that appeal to various user groups, built in the style of social networks. Some will be aimed at youth markets, others at the so-called working families, others at upmarket, culturally influenced, older audiences. Some will be defined by geography (that is, city or regionally oriented); others by specific interests.

They will be hybrid sites with open-access for all the breaking news that is currently provided free today. It won’t cost you to learn of a plane crash, a government initiative, or a sporting result.

Beyond the open pages will be a raft of services and specialised information. A clue may be taken from the launch last week of Times Plus in Britain—a site majoring in culture and travel initiatives, where subscribers to The Times and Sunday Times will have automatic access, and non-subscribers will be asked to pay pound stg. 50 ($88.65) a year to join the club. On offer are travel deals, tickets to film and theatre previews, discount book offers, cross-promotional offers for pay-TV services, upgrades on airlines, and so on. I figure it’s no coincidence that many of the offers have a listed value of pound stg. 50—the same as the joining fee.

Wow. Sounds great. Bit of contra here, bit of contra there, and you're on the way. You give us fifty quid and we give you fifty quid back. Win win.

But err what happened to all that Freudenstein blather about voices surviving and thriving and being justly recompensed for the expense of paying for their content? Promotional offers, upgrades, previews, discount offers? Steak knives?

That's the quality journalism we'll be forking out for? Or will it just be "cultural and travel initiatives"? With bonus steak knives.

Well good luck with that.

As well as the value-added shopping aspects of the site, there’s a blog facility for the exchange of views and other user input. It’s a virtual community designed for the typical Times reader—upmarket, well-off, older folk with the time and money to fund a peripatetic, cultural lifestyle.

And we pay 50 pounds a year for the right to express our views on a blog facility in a virtual community? Isn't that the intertubes? Well good luck with that. Better make it a good quality set of steak knives.

There's even more of a pitch from Day, about the way the new model will be like a newspaper, except of course it can't be, because then you'd be paying for content that's free at the moment (and will go on being free on the ABC). After all, we all pay for content right now:

We know people will pay for their media services. Millions of newspapers are sold each day; we are among the most avid consumers of magazines in the world; a third of our homes, reaching 40 per cent of the total population, have subscription TV. Neither the ABC nor the commercial radio and TV networks are free. As taxpayers, we each flick about 20c a day to the government to keep the ABC running while commercial services are supported by advertising which is paid for through the shelf-prices we pay for the commodities offered. We pay our ISPs for access to the internet; depending on our plan, we pay download charges for services such as the ABC’s iView—yet conventional wisdom says we won’t pay for news.

But will we pay for News Corp's version of the news? When what's being offered in this new world seems to be a cultural and travel initiative? Didn't Day just say that we don't like to pay for news, and whatever news turns up on these new sites will be hybrid, with the breaking news content still free, as it is today? So what's different? What will make me tickle my purse?

Well, we’ll see. We have paid in the past and while the internet offers new digital delivery systems it doesn’t necessarily change fundamental human behaviour. Give people choices, and they will make them. Not everyone will pay for online services, just as not everyone chooses to buy a newspaper or watch the ABC, even if it is free.

In a competitive media market, the name of the game is to attract audiences large enough to support your business model.

Do the sums. Even if we use the ABC’s unavoidable baseline cost of only 20c a day and apply it to a mere 5 per cent of Australia’s population, that amounts to $80million a year—enough extra funds to underpin a high standard of journalism in print and online products.

Oh dear, yet again with the ABC, and its "unavoidable" taxation by stealth cost of only twenty cents a day.

Well let's see what the special skunk works come up with, and let's see how the market responds, and good luck with all of it, but every thing I read from News Corp reminds me of the takeover of MySpace ... and the clear indication that when it comes to the new world of digital content, Chairman Rupert and his minions don't have a clue ...

Meanwhile, can we just call an end to this tiresome phoney war 'dropping the leaflets behind the enemy lines' phase of proceedings? Get on with the real fighting, and show us the product. Before we all start sitting down and watching the new FTA channels. Oops, seems like we're doing that already ... (here). Oh no, won't someone think of pay TV?

(Disclaimer: written by disgruntled former MySpace user).

(Below: time to sing from the same song sheet? Damn, even in the olden days the deviant tax payer funded bludgers were getting into bed with the likes of J. Albert & Son).