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Guest Post: Media Legend Larry Kramer Says Media Business is in a Gutenberg Moment
Submitted by Damien Hoffman of Wall St. Cheat Sheet
A lot of people theorize or blog about the future of media. However,
a handful of people actually walk the walk. One such person is Larry
Kramer.
Larry spent 20 years as a reporter and editor at the San Francisco Examiner, the Washington Post, and the Times of Trenton.
However, during the tech boom in the 90s, Larry seized the opportunity
to become a successful media entrepreneur when he founded MarketWatch
and managed the company as Chairman and CEO.
After turning MarketWatch into an incredible success, Larry spent
time as a senior adviser at venture-capital firm Polaris Venture
Partners. He has recently started teaching at Newhouse School of Public
Communications at Syracuse and is putting the finishing touches on his
new book C-Scape: Navigating the Future of Business
Although Larry is on the Board of Wall St. Cheat Sheet, I thought it
would be great to share some of his awesome insights with our audience.
So, last week Larry and I sat down for a special chat about what Larry
calls a “Gutenberg moment” in media, the incredible breakneck speed of
change in media, and some of the key variables to watch if you plan to
stay ahead of the curve …
Derek: Larry, you are currently teaching at Syracuse. What
do you tell your students when they want the ingredients for success in
today’s media business environment?
Larry: First, you must be incredibly open minded about the form
factor of delivering media. You have to watch closely because
everything is changing.
We’re in what I call a “Gutenberg moment.” This means everything is
changing in dramatic fashion. The whole story telling process is
changing. We’re creating an entirely new platform on which you can use
video, audio, text, interactive graphics, and more in a single media
which is very ill formed and just forming.
The habits of content consumers — news consumers, information
consumers, entertainment consumers — are totally up in the air. So is
how much they watch at home, how much they watch in movie theaters, and
how much they watch on portable devices. When the iPhone came out it
increased usage of the web on all phones by thirty percent. Now imagine
what’s going to happen when the iPad comes out.
So don’t make your bets based on what people are doing right now.
Pay attention to consumer behavior. Look at how people consume your
content. Try to be proactive in how you design content for them … then
see what works.
For example, play around with different things. It’s really an open
and interesting time. The hardest thing to do is to understand which
themes resonate. The things that stay the same are issues of journalism
— fairness and news gathering. But then there’s this whole new set of
rules that are forming and you must pay attention to those while
understanding they could keep changing.
If you want to be successful, learn two things: journalism and
entrepreneurism. That’s what I’m teaching. I’m teaching a mix of
management and journalism at Syracuse because I think you need both.
The percentage of journalism or media students who go into startups is
getting higher. Part of the reason is there aren’t jobs at the
traditional companies. There’s no reason that a start up can’t be
competitive with any media company when the forum of media is changing
so quickly.
Derek: That raises an interesting point about quality and
quantity. In today’s world, anyone can put up a blog, write, and
publish in the journalism world. How does someone become a legitimate
journalist on the Internet?
Larry: It’s very hard. This is one of the roles that I’ve been
trying to teach and is growing in journalism: curation. Meaning, it’s
not just about what news you cover and what you publish, it’s also
about helping your audience choose from all the information that’s out
there. If there are ten thousand bloggers, you’re not going to read
ten thousand blogs. So, you’re looking for help to decide which ones
you should read and which ones are legitimate.
In journalism we have a very strong task which is to train and teach
people the difference between a journalist and a person who posts
information. Under what criteria does a journalist operate? What’s
different between those worlds?
The hard part is to get the journalist to understand it doesn’t mean
you’re better — it just means you’re different. A blogger’s audience
wants bloggers because frequently bloggers have great insight.
Bloggers are not generally operating under the journalistic umbrella
where they have to be fair or look at the things journalists look at
before they publish.
For example, there’s a lot of things going into consideration before
you just give somebody the pages of the New York Times. However, a
blogger has no such restrictions. So, a blogger can operate a blog
lots of ways. You can simply be interesting or there are some who try
to become more journalistic. Ultimately, if they get really good,
they’re usually swallowed up by media companies who will pay them a lot
of money.
So, I think journalism will survive and prosper, but it’s fairly
different than years past. For instance, in the old days you wrote a
story as a journalist and that was it. You wrote it, it got
published. Now, that’s only the beginning of the process. When you
write something it gets published, then the reactions start and you’re
suddenly being gauged by people who have something to say about your
story. They might even change your mind about it. Regardless, readers
who comment expect you’ll pay attention and react.
I think journalism is a high calling. You must have a deep rooted
desire to change the world — especially while we figure out how to fund
it. We are still figuring out how to build new ad models and charge
people for certain content. A lot of people aren’t optimistic we will
find a sustainable business model for journalism, but I am very
optimistic.
Derek: Can you talk a bit more about the business model shifting?
Larry: Sure. We pay for content now, but people don’t realize it.
If you have cable TV, you’re paying for Fox News, MSNBC, CNN, and ESPN
even though you don’t have a line item on your bill. People might want
more control over where that money goes — and that’s part of the
consumer taking more power — but they certainly understand they have to
pay for things. So, if we build similar kinds of models around the
other platforms, we’ll be fine.
Derek: Larry, in your new book you talk about how media is
in a “tailspin.” How would you rate the pace of change we’re
experiencing today versus when you started your career?
Larry: There’s no comparison. It is so accelerated right now, it’s
almost frightening. I’m really serious about this whole Gutenberg
moment. I really think we’re not even at first base for what form
we’re going to be using for some of the devices that are already coming.
When people have the iPad, they’re going to have expectations about
how journalists tell the story. For example, if we were telling
readers that very moment about the Berlin Wall falling, the reader will
want to see video of Kennedy’s speech or the wall falling at the very
time we’re telling them about it.
If we’re telling them about a hot new car, they want to see the car,
they want interactive graphics about the car. Basically, readers want
things they would have never expected a couple years ago because now
they are available.
What’s interesting to me is we’re in this era of a rapidly changing
technology that allows us to be so much better at story telling — so
much more efficient — and we don’t yet have a generation of story
tellers who know this medium. So, the technology is kind of ahead of
us right now. It behooves us in the journalism world to get our heads
around it and start helping consumers understand how they can use it.
However, we’re nervous to do that because it’s changing so fast and
so furiously. We start training to use one thing and then it’s, “Oh no
… we don’t use that anymore. That’s old stuff.
It’s also hard to teach. So, one of the things I’m doing at
Syracuse is bringing the case method to journalism because books are
outmoded already. This is a Harvard Business School method of
teaching. The books about journalism and the problems of journalism
can’t be written fast enough.
This spring I’m bringing some students down and embedding them in
three or four companies here in New York City. I’m having them deal
with the issues companies are really dealing with right now because
they’re so unique. They’ve never had anything like this happen. It’s
a great experience for students.
Derek: Which begs the next question: what does the future look like for content publishers?
Larry: Good question. Again I’m optimistic. In my book C-Scape, I
peg the shift that’s occurring in all media businesses and in all
businesses to four different factors that will start with C: the
consumer, curation, content, and convergence. We already discussed the
first two. The next one is content.
In a world where buyers and sellers are getting maxed and middlemen
are getting squeezed, the distribution model of television starts to
fall apart. The people who still make money are those who own the
content no matter how it’s distributed.
That’s why Comcast (CMCSA) is spending a fortune to buy NBC (GE).
Comcast once had a great business because you had to use them or you
didn’t get cable TV. Well that’s not true anymore. Now you can get a
satellite dish. Soon you will get all those shows on the web.
The future is ownership of the content. So, the media companies
which concentrate on good content will do well. It’s going to be
painful as their business models change, but they will change and
survive because people will still want good content.
On the other hand, if good content starts to disappear because
people refuse to pay for it, then people will step up and pay because
at the end of the day they want it. We just have to give them easy
ways to pay.
Derek: So content is still King?
Larry: Absolutely. More so now than ever. What’s happened is we’ve
made content very accessible by removing several of the barriers — so
everybody wants it. Now we know more content exists regarding
something that interests us. For example, if you’re a Cleveland’s
sports fan and you live in Florida, there are thirty places you can go
to find out about last night’s Cleveland Cavaliers game and Lebron’s
performance. You might even be able to watch it for free on the web.
The bad news is this phenomenon messes with the existing business
models where all the money was made from the network TV and then spread
out here and there. But the good news is that more people will have
access to the content. If they want it, they’ll be able to see it at
whatever price offsets the costs.
Derek: How do all the new devices play into the tailspin?
The 90s saw an emergence of desktops and Walkmans. The 2000s saw the
emergence of laptops, iPods, and flat screens. What do you think will
be the big trend of the next decade?
Larry: Mobility. The ability to simplify the process of seeing
content while traveling and seeing it in a better way. Everybody will
have some form of tablet like the iPad. Consumers will access all
information wherever they are no matter what they are doing.
Every other device will still exist. There will still be phones and
desktops. In fact, most people will engage content on multiple
platforms — and hopefully we’re going to be able to simplify that by
charging them according to this usage. For instance, if you pay for
HBO, you get it wherever you need it that day.
Derek: How does advertising work in this new environment?
Larry: The advertising models are going to get better on the web
over the course of the year. Advertisers will get better at controlling
their platforms. Advertisers will target users better, give people
choices of ads to watch, and do all kinds of things they never could
do. So the ad models will get better because you’ll be able to charge
more for the ads that you run and therefore run fewer ads.
Derek: And what do you think of the entrance of Google (GOOG) into the phone market?
Larry: Huge. I think it’s going to be a monster. Since I use gmail,
my contacts and everything are now in the cloud. I could definitely see
using a Droid phone because of that. They’re making the best
applications to take their own tools to mobile.
Derek: Ultimately, do you think mobile phones and the innovation of these devices will compete with the iPad?
Larry: If the iPad remains a hard encased device that’s large and
the size of a big book, or at least the footprint of a big book, then
it’s not going replace phones. It is portable in how the technology
works, but it’s not really truly portable if you’re just running around
on your own. You can’t put it in your pocket.
Now that may change. I think the idea that you might just have a
phone on you which will allow you to do everything is probably true.
You now have one single device that covers you but it isn’t going to be
the best way to do a lot of things including reading documents. So how
quickly people have uses for a second device and have that all fit in
is going to be important. I just don’t think everybody wants one device
that does everything.
Derek: Do you think in your personal opinion the U.S.
economy is currently undergoing a recovery? Do you think that the U.S.
economy has reached a recovery point? Or do you think there’s still a
lot that needs to be worked out in today’s business environment?
Larry: Well, I think they’re both true. Yeah we are seeing a
recovery and I think the market place for ideas is high. We’re seeing
lots of cool new stuff again. New technology is popping up. We’re
seeing a lot of pretty interesting technology that has heated up and
that’s great.
But, American industry has chosen the moment where we’re so scared
of everything that’s happened, American companies haven’t really
started hiring again. So, productivity is monstrous because as things
are getting better, companies are doing it, but they’re not hiring
people to do it. There will be a moment in time when we hit the
exhausted button and we can’t do anymore.
For now, we are getting a lot more out of people and maybe just
because they’re scared about losing their jobs. Until a lot more
people come back to work it’s going to keep things slow, which is
unfortunate. So it’s like a mismatch between the era of ideas and who
can use them. But, it is a cool time and in my world, in the media
world particularly, it’s a driving time of change. Like I said before,
I think it’s a Gutenberg moment. I think it’s so big it changes the
world.
Derek: Do you think newspapers or books will become extinct in this coming decade as tangible sales are declining?
Larry: No, I don’t think so. I think there will continue to be
more elite products. Books are going to be the railroads of this
generation. If the railroad had stopped and their business is moving
people from here to there, railroad companies would have been in the
car and airline business too. Instead, they were in the railroad
business. So, if you’re in the book business you’re in trouble. If
you’re in the ideas business, you’ve got a shot here.
Derek: Speaking of books, can you share some more details with us about your upcoming book?
Larry: The working title is called C-Scape. It basically started as
a book about the media industry business models being in chaos because
of all these new digital platforms, new forms of digital story telling,
and how it’s going to change. It is changing the media industry, but
more importantly it’s going to extend into every business.
Increasingly, all businesses must become more like media businesses
because of how they have to deal with their constituencies, how they
have to tell the story of their products, and how they have to
basically get much closer to their consumers. This means listening much
more because the consumer has so much more power.
I’m taking those four things I mentioned — content, the consumer,
curation and convergence — and detailing how each of those words
represent a fundamental piece of change that’s occurring. I’m showing
how they’ve changed the media industry, but also how they’re impacting
lots of other industries. And, some of those industries are already
doing some really cool things to insure their survival … and others may
not be. So in the book I exmplain who they are, what to look for, and
some thoughts on what it’s going to be like in a few years.
Derek: Do you have an expected release date for your upcoming book?
Larry: The Fall of 2010.
Derek: Thank you for your time, Larry. I hope to speak with you again when the
book is released.
Larry: Thanks, Derek. Continue to keep up the great work!
This was less than half of my interview with Larry. If you are
interested in how Larry started in his early career, the story of
MarketWatch during the tech boom, Larry’s thoughts on other technology,
and more, simply join the list for our upcoming book “Inside the
Brightest Minds on Wall Street” …
»
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Tyler is posting a lot for a traveling dude.
Hello MsC! Shall we not question where our daily bread comes from? ;-)
Oh, and Mr. Italian guy - thanks to you, as well!
Nice scratches for you doggie! I guess you are telling me not to bite the hand that feeds us. Point taken! :-)
everything-a you need to know about media is described by marshall mcluhan
but we the intellectuals need to eat and drive classy cars and screw the sweet asses, so we write
hence more books
So sorry for http://www.zerohedge.com/modules/wysiwyg_spellcheck/tinymce/spellchecker...); background-repeat: repeat-x; background-attachment: initial; -webkit-background-clip: initial; -webkit-background-origin: initial; background-color: initial; cursor: default; background-position: 0% 100%;">Jackin the post - my apologies.
However...
I/We have not Seen MARLA - post-comment-edit-or do anything in AT least 2 months!!!
WHAT..... ZH has become of Marla?? and the Great job she has done for this site??
you-a keep up that good work, toots.
poor marla, a woman with a brain, but a woman.
My first thought while reading that was 'Damn, probably this will happen to ZH at some point'.
Then I realized that the Durdens and Marla (presuming she has not already evacced to her primary bug-out location) deserve compensation for their hard works. I say - go for it if the ship comes in. If the buying company keeps up the standards of the site, it's win-win.
If not (more likely, IMHO), readers will bail and find other bloggers who will see the potential for profit and step up to fill the void, and the media conglomerate will eat their investment while ZH founders sip adult beverages (with the obligatory little umbrella on top) on the beach in (insert resort island of your choice here).
Ah, the increasingly rare and elusive justice of capitalism.
a professeur of mine used to say-a if you like to take vacations, you don't try to convince the idiots that god is dead
you want peace in the world and peace means idiots believe in god
so enjoy the life and forget the truth; the truth is a lie too say nietzche.
I'm not a goddamn consumer. I'm a citizen. Jesus, I hate being referred to as a product consumption unit.
Newspeak in all it's glory. It's intended to marginalize, even victimize us. The word "citizen" infers responsibilities to yourself, your neighbors and your country, including oversight of those who are running the country. Citizenship is not a passive endeavor.
When you are a consumer, you have but one purpose, to mindlessly consume. No care, no worries, no responsibilities other than to consume. Your are no more than a cow, grazing in the abundant fields of consumer products in order to produce milk, more milk producers and eventually meat.
I prefer the appellation "producer" because in order to consume, first I must produce something to trade for the thing consumed.
thanks for this story. so much to add. just a few quick hits.
a lot of people go to Jon Stewart and the Daily Show for their news. i tell people he is the Cronkite of his generation (he is trusted), and Comedy Central doesn't seem to be getting either too rich or too powerful, (and that's a good thing), and the rule of a successful media thing is that it spins itself off, it launches the careers of other comedians, and other shows.
when it comes to journalism there is still a part of our reptile brain which insists on the smoking gun. anyone who has served on a jury knows people are put in jail on a lot less than eye witness testimony, and eye witness testimony is some of the most unreliable. its a matter really of how we gather facts, where we put the emphasis, how our reasoning is going to lead us to make better decisions. ultimately politicians can be replaced with software programs, ( i had a plan once to run for city council as software program) and trial by media is a good thing because all the facts get out, and the public is pretty keen about sifting through them. (ergo the role of the journalist or blogger, and what Tyler does so well here)
as for CC, the rules of the comedy game, (hence the new journalism) are the Southpark Rules, 1) get on all sides of your subject, 2) yell as loud as you can 3) leave everything on the table, don't hold anything back, and wake up tomorrow and do it again.
content is a fickle maiden, i google a story and i get the same AP sheet printed in twenty different newspapers.
advertising is a system which closes around itself, once everyone has everything they need, what exactly did you think you were going to sell them? the vast resources wasted on supply side advertising boggles the mind. the internet is a demand driven consumer. I feel like a custom printed T shirt with an image of Obama cross imaged with Che Guevera, and a background of roses. So you dial it up.
the challenge of manufacturing is to create unique products.
of course the notion of money as a method of transferring wealth is seriously stretched to the breaking point, as people realize they need less than they already have. the next technology revolution will answer our basic needs, food, shelter, and transportation, at almost no cost, obliterating the old political, social and religous institutions. that may be a way off, for right now the death of the corporate model is enough, too large, too overextended, too dependent on a business model which seeks to cut profits by expanding market share.
and of course America is in trouble because the corporate business model and the political corporate model are one in the same.
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