Business Models

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According to Slate, YouTube draining money

There is an interesting article in Slate about how much Google is losing to keep YouTube running.  It quotes a report by Credit Suisse that Google will lose $470 million on it this year.  While user-generated sites like Flickr, Facebook, and YouTube are immensely popular--and get a lot of press--they've become, according to Slate, a "financial albatross."  Advertisers are less drawn to the content, and the company is stuck providing the bandwidth for the public to put up their pictures and videos:

Newspapers starting to pressure Google

As newspapers look for ways to make money online, they're grumbling about sites like Google that are making money off their news.  Newspapers don't want to pull their articles from Google searches and Google News (the links bring readers to newspaper websites) but rather force Google to start paying them something.  In what form (subscriptions, content deals) no one seems quite sure, though people are starting to apply pressure.  Murdoch

Two takes on the fate of newspapers

ESSAY: Two media reformers propose $200 tax break for newspaper subscribers; news literacy in schools.

I came across two articles this week about the fate of newspapers:  Clay Shirky's March 13th post, "Newspapers and Thinking the Unthinkable," and John Nichols' and Robert McChesney's recent Nation article, "The Death and Life of Great American Newspapers."

They clumped together in my mind, not because of how similar they were,

Even more on the Kindle

I'm not sure why I'm so interested in the release of the new Kindle, but it appears Slate is as well.  Over the weekend, they published another article on the portable reading device: "How the Kindle will change the world."  The article by Jacob Weisberg doesn't say much that the other articles (here and here) didn't, except to strike a sunnier note:  while the potential rise of Kindle might make it harder for writers and independent publishers to make money, there's every reason to think that the opposite might happen, that it could "spur new forms while breathing life into old ones."  He doesn't say

Advertising vs. Paid Content

A guest post written by Eric Clemons on TechCrunch, "Why Advertising is Failing on the Internet," predicts that online advertising will continue to fall:  "It’s not that we no longer need information to initiate or to complete a transaction; rather, we will no longer need advertising to obtain that information.  We will see the information we want, when we want it, from sources that we trust more than paid advertising." He also breaks down his scenarios for making money online.

New York Times ventures into local blogging

From the Information Valet Project blog, Emily Sussman asked recently if  hyperlocal blogging was a smart move for the New York Times

She's referring to a move the Times made last week when they launched two new blogs, one for neighborhoods in Brooklyn and one including the Maplewood region of New Jersey.  Both are staffed with a full time reporter.  Edgy they are not; they seem to want to recreate the idea of a cozy suburbia.  A section called "On the Fridge Today" shows pictures from the local elementary school. 

With the sites, the Times is wading into the hyperlocal, willing to spend money now to see if there is a business model in the future.  According to Sussman's article, they're hoping to monetize it by creating a local blogging platform, lending their name to local bloggers who would give the Times a portion of the profits.  READ MORE.

Google CEO takes a look at funding models

On March 6, Google CEO Eric Schmidt was on Charlie Rose, where he talked about funding (including the figure that 98% of Google revenue comes from advertising).  MGP's Bill Densmore blogged about the interview:

"Google CEO Eric Schmidt has laid out his vision for the three principal ways information will be financed in a digital age. His answer, not surprisingly: Advertising, micropayments and subscriptions. What’s notable is his particular take on where each method can be most effectively deployed."  Read the rest here.

More notes on the future of newspapers

Bill Densmore (MGP's Director, who is spending the year as a Reynolds Fellow at the University of Missouri-Columbia) recently typed up notes from a presentation there about the future of newspapers.  In the notes, Doug Crews and Vicki Russell, both Missouri newspaper people, offer up their advice.

Positive outlook for local news sites

For some positive news:  David Westphal recently posted a story on OJR covering how local news sites have been affected by the recession.  The verdict (gathered word of mouth, through interviews) was that things look good so far.  The article includes interviews with giraffe prospects West Seattle Blog, Baristanet, New West, and others.

How will Kindle affect newspapers?

Earlier this month, Amazon released a new version of its electronic reader, Kindle 2.  It was created primarily as a replacement for books (you can carry over 1,500 books on it, and it's as thin as a pencil), but you can also read newspapers from it. For $13.99/month, Amazon automatically sends the paper to your Kindle every morning, and you get everything that's in the print version, minus some graphics and things like classifieds.

That makes Amazon a delivery system for the New York Times, and on January 12, Slate's Jack Shafer wrote that the New York Times shouldn't be giving over this power:

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