Time for some New Year reality: In just 10 years, three of the world’s larger daily newspaper groups (Australia’s Fairfax, the UK’s Trinity Mirror, and the New York Times Co) have each managed to lose more than 85% of their stockmarket value. For all the job losses, cutbacks, and online loss making, it is shareholders who have suffered most at the hands of caught-in-the-headlights media barons. Something’s got to give.
Will 2012 be the year when the world’s most articulate businesses get real?
Will we finally start to see daily newspapers facing up to a smaller web-based future or turning into something else? The best of these long-established brands could become online retailing hubs. Tabloids can morph into digital magazines, driven by everything from travel and financial services to fashion, electronics and grocery. But will retailers beat media to making the most addictive cocktails of content and ecommerce? Or will the neediest paper tigers be seduced (something rather than nothing) by AOL’s effervescent Huffington Post?
And what about magazines, losing their advertising market share and news-stand sales but cocky about the page-like promise of the iPad? Will we see international brands like Vogue, Cosmopolitan, Grazia, and Elle ramping up their online profits from fashion, health, beauty and travel? Will we see Hearst or Time Warner or Bauer launching the “next” Amazon? When retail chains collapse this year, will traditional media groups scramble to pick up their online ops? There should be some big ecommerce splashes in 2012 after toes-in-the-water by newspapers and fashion magazines last year. In earlier times, News Corp would have been making the pace.
It is easy to see that this may just be the year when the battered hard copy titans of the 20th century start to learn their new lines:
“media = retail, retail = media“.
Meanwhile, across the media spectrum, network television has been enjoying the warm glow of business (more or less) as usual in 2011. Enough to make network owners think they have the box seats in the great media revolution… But, just look at what’s coming.
If you want to see the future of TV, go 35 miles north of San Francisco to the suburban wine-making town of Petaluma. Or just go to the web. There, you will find the TWiT ‘netcasting network’, begun six years ago as a series of podcasts by tech journalist and Emmy-winning broadcaster, Leo Laporte. The 55 year old dropped out of Yale in the final year of a Chinese history degree and turned to radio. He began specialising in talks on technology in 1990 and then turned to Tech TV. He stumbled into podcasting, even now an overlooked corner of the media world, where some 150,000 regular shows are dispensed by the iTunes store. In the US, almost 25% of the population listen to podcasts; and a sacked syndicated radio comedian, Adam Carolla, has notched up 60m downloads in less than three years of his daily show. Podcasts were Laporte’s low-cost route to media ownership.
Within a few years, he was producing 30 hours of podcasts per week, with his flagship ‘show’ notching up some 250,000 of downloads. Now, his TWiT network (“The Week in Technology”) is being downloaded more than 5million times a month. TWiT streams video all day long that captures Laporte’s podcasting and a weekend show on computers, ‘The Tech Guy”, which adds 500,000 more listeners through 140 radio stations across the US.
It has all (seemingly) been nicely amateur with Laporte hosting TWiT from his old wooden California cottage. But there’s nothing make-shift about the audience – and the profits. Laporte started out by eschewing advertising and asked listeners instead for contributions of up to $10 a month. But, as his audience grew, so did his ambitions. He took on a business partner and started selling advertising. Today, companies as diverse as Ford, Visa, Microsoft, and AOL, are paying a premium price (of some $80 per 1,000 viewers/listeners compared with the US average CPM of $15) to reach Laporte’s loyal, tech-savvy audience. His revenue has doubled for each of the past five years. As one of the first people to tap into the real business potential of podcasting, Leo has been able to market a niche audience that advertisers love, 30% of it outside the US. And it’s still growing fast.
Revenue reached $6m in 2011, the year when Leo Laporte’s true ambitions – and potential – became clear. He established a purpose-built studio (called the Brick House, to distinguish it from his cottage down the road) and declared his goal of becoming “a 24-hour technology news network, the CNN of technology”: his Oprah moment.
For broadcasters, including the UK’s regulators who have been looking closely at the Laporte operation, TWiT looks increasingly like the future of TV – or quite a lot of it.
Leo told his ‘aw shucks’ story to a TED conference in Dubai two years ago, where he spoke of ” a little podcast network which I have built into an internet television and radio station in this little cottage in the middle of nowhere in Northern California. Now, we’ve decided to go with our 5million audience and develop it into a full broadcasting business, the CNN of tech.”
TV professionals the world over have long talked about the way that their medium will weave itself through the web; and the latest internet-connected televisions point the way to computer integration straddling home screens and mobile devices. TV producers talk a good game of their future security based not on broadcast channels but on-demand content, pausing blissfully to say that consumers will pay for good content.Mmm. But the TWiT network tells us something else about how TV might develop. The fact is that Laporte’s not-so-amateur network is already highly-profitable, even if its owner chooses only to take his salary from $20,000 per month viewer-user contributions.
Simple, versatile and low-cost
The TWiT network is significant because:
- The technology is relatively simple, highly-effective and brings together TV, the internet, podcasts and social media. And it is good.
- The operations are, by TV standards, stunningly low-cost. Laporte has been making a profit since he hit 2,000 regular viewers in his first year. At $6m and rising, he could have pocketed more than $1m in 2011, if not for investment in the still-not-too-fancy but much better-equipped new studio.
- This is dynamic, open-access TV where viewers Skype in and engage in dialogue online and on-screen. In the age of Twitter and worries about the way that “business” is taking over Facebook, TV channels operated by their viewers (sort of) could become huge. TWiT offers its viewers not just friendliness but also authenticity: controversial views are challenged and corrected in real-time in ways which would appeal to many consumers reared on the untouchability of mass media.
- Like the web itself, this new generation TV is seamlessly international
Laporte has been able to prove the viability of this real-life cottage industry TV because he is a geek discussing the technologies that have millions riveted. But look beyond that. It is easy to believe that there can soon be hundreds of other specialist networks operated just like TWiT. Perhaps it is the name which prompts the thought that someone, somewhere will right now be planning a Twitter-like TV, perhaps ‘Mr Twitter’ Jack Dorsey himself. But it is also easy to imagine the development of narrow-cast channels for food, finance, travel, relationships, and a thousand other topics. Serious niche-interest news channels are an obvious possibility, as are local networks to fill the gap left by the bankruptcy (in several ways) of many regional newspapers.The explosion of the blogosphere might hold clues to the future of TWiT-like TV. And you can bet that at least some of it will be good business – and challenging for traditional media.
For all his New York upbringing, Leo Laporte is every bit the West Coast idealist, distinctly non-mogul. He told his TED audience: “I wouldn’t be here if it weren’t for the internet, the most democratising force in the world.I started a little podcast network. Now I have a global internet TV and radio audience. But I don’t want to own it. I want to give it all away. I want all of you to do the same thing.”
Laporte’s huge following is propelled by the unlikely mix of a booming voice, love of hawaiian shirts and an ability to distil complex tech topics into digestible bites. But behind the folksiness lies 35 years of radio broadcasting experience and an infectious enthusiasm for his subject. His personality runs right the way through TWiT and recently even extended to accidentally-aired sexual chat with his CEO-lover.
Despite his original aversion, Laporte has a clear view of why blue-chip clients are lining up to pay TWiT’s premium advertising rates: “Our audience is authentic, genuine and enthusiastic. We treat them as intelligent and these are the smart people that advertisers really now want to reach. Advertising is moving away from the mainstream messages of ‘tricking’ people via mass media, to targeting people through Facebook and Google. Traditional mass media required the high costs of printing presses and transmitters but that’s all changing because of the low cost of digital production and widely-available distribution through the internet. As media consumers, we’ve been trained to sit down and shut up. And now it’s time to stand up and be heard.”
Just as the internet has been variously touted as both the future and the finish of traditional media, it is easy to believe that TWiT will become the inspiration for tens of thousands of networks. And a whole new way of doing TV. Just watch.Have you signed up? http://flashesandflames.com Media Fortune, Fame & Folly