The Daily Peg: Pegasus News, Inc. Founder's Blog

No schadenfreude here

I've written a good bit about the Belo layoffs here, and someone suggested to me today that some readers might be mis-inferring some sort of glee in the postings. Quite to the contrary -- being laid off sucks, particularly when it's by a mega-corporation that's only making smaller tons of money than it wants.

Instead, I'm incredulous that an organization with flagging circulation, whose lifeblood should be local content, is reducing its force in the very areas where it has and is squandering a unique advantage.

Furthermore, I have a general problem with layoffs, in a "cruel-to-be-kind" vein: I've see my share of layoffs in my young life, and my assessment is this: 99/100 times, if management was more dilligent about firing people who weren't pulling their load, the layoff would be unneccessary. But in a reticence to be in a position of telling someone they are sub-standard, they've hurt the organization and the individuals who later have to be laid off in order to make up for the expense of the dead weight. And, when it comes down to the actual layoff, in order to be "fair" (read: not get sued), companies lay off discrete classes instead of individuals, so the bad egg(s) that caused the problem to start with are often the one(s) who survive to keep dragging the organization down.

For what it's worth, I hope that some of those laid-off Beloites will eventually find positions with us. We'd love to have you.

Getting hyperactive about hyperlocal

Even though things have been progressing quickly for us, the wave of folks talking seriously about topics like hyper-local and open-source journalism is accelerating some of our activities. There is a definite "moment" here to be seized.

Today comes an article in the OJR alerting us to things being done in smaller communities, but by important players. I swear I wrote last night's post before reading this (emphasis mine):

"We are the traditional journalism model turned upside down," Fulton told me via e-mail. "Instead of being the gatekeeper, telling people that what's important to them 'isn't news,' we're just opening up the gates and letting people come on in. We are a better community newspaper for having thousands of readers who serve as the eyes and ears for the Voice, rather than having everything filtered through the views of a small group of reporters and editors."

The Northwest Voice site is an embarrassment of riches. The front page recently highlighted Bulldog Day at middle school, when parents attend a day of school with students; a profile of a restaurant at a Shell gas station; and a photo of a nine-year-old girl dressed up like a cat for Halloween. Someone go wake the Pulitzer Prize board.

Now all that might bore you, but if it was a school where you teach, or a gas station where you eat, or your nine-year-old daughter, you'd be rapt with attention.

Sound familiar?

But if these nascent efforts bring more people into the editorial process and help the media cover smaller communities better, the so-called bush league content might just bring in major league revenues, at least in aggregate. The idea is to tap into smaller advertisers who hadn't considered newspaper ads before.

The Northwest Voice has had growing revenues, and Fulton expects to hit consistent profitability by the end of the year, just seven months after launch. The publication has three full-time staffers -- just one editorial person -- and one part-time production person. Its site includes little Google-like text ads that link to site-hosted ads for small businesses, often repurposed from print ads. The real money so far is in the print publication because it has a controlled circulation that includes every community household.

Fulton says that it's not just advertisers who prefer the print publication. "The print edition is the product readers prefer," Fulton said. "Readers say they like the tangibility of print and also like the tabloid format because our design is very visual and uses lots of pictures. Over time, I believe more readership will shift to the Web. I imagine the print edition will eventually become a Web index of sorts in which we'll publish excerpts of articles in print and direct readers to the Web for the rest."

Jeff Jarvis (whose hedline I didn't see until after posting this):

"The business strategy and hope -- quite unproven still -- is that with a critical mass of very local content we will attract a critical mass of local audience," Jarvis said via e-mail. "And because we can target advertising down to a town level, and because we will use automated tools to reduce the cost of sale and production, we can finally attract and serve a new population of small local advertisers. Again, this is unproven; we are testing the thesis."

My take: It works OK in small markets, but it isn't really hyperlocal. It's just bringing back the local newspaper. It's a nice sustainable model for a small local operator. But to really put in some juice, do a hundred hyper-local "editions" in a big market.

"The question is can you create opportunities for citizens to get informed and inform others about micro-news that falls under the radar of news organizations who don't have the resources?" Schaffer told me. "And in the process you seed the interest in participating in community issues. Can you create a sense of news entrepreneurship that I think the industry needs? And in the process can you train a new generation of journalists in a new way of doing news and hopefully a much more diverse pool of journalists?"

Bring me my weed n' seed(Or, how a neighborhood meeting validated a business plan)

THE 1177-- A strange dateline, no? Yet that's precisely where I'm writing from, as I learned last night at a meeting put on by the Ferguson Road Initiative. That's not the least of what I learned, but perhaps the most personal lesson was that the whole thing rolled out before me as a perfect justification for the Pegasus News business plan. But I'm getting ahead of myself...

Now I really get why wireless matters

Faithful readers will remember my gradual coming around on why we need to be focused on wireless content at launch. Timothy Grayson's latest post brings me the tipping point.

See, my theory on information technologies is this: the time to bet on a technology is when it becomes a means of distributing either pornography or the Neiman Marcus cookie recipe.

Or hyper-local news content. That works too.

Wireless content TK

A Yankee Group study on wireless providers trying to get a piece of the entertainment pie comes down to one thing: they desperately need content:

Wireless carriers want a share of the $112 billion consumers spend directly on entertainment annually in the United States (see Exhibit 1). To achieve this goal, carriers are leveraging access to the network in order to negotiate carriage agreements with content owners. However, media and entertainment companies don’t view the mobile distribution as a critical channel. As such, they are willing to withhold their content to force carriers into a distribution agreement they deem acceptable. However, this limits the growth of mobile entertainment and is short-sighted on the part of both industries.

Even more new friends

Turns out that there is a J-school thinktank, funded by Knight Foundation grants, devoted to creating the type of hyper-local media we propose. Granted, they seem to be looking at smaller communities, but we're definitely on parallel paths.

Magazines starting to "get it"

Media Industry News features magazines who are starting to realize that they can't just throw their print content online and call it a day.

DRM: A knotty problem

This article (via Tim Oren) on Digital Rights Management brings up some tough issues for anyone in the content business. Although it focuses on broadcast rights, the same type of thing is going on in the print/online content world.

There's a fine line between greed and IP protection. Increasingly, the world is moving to a free content model, but there has to be some way to make a buck. (Even the WSJ is running a free site access test this week.) If the moneymaker is advertising, and the most market-efficient solution is hyper-targeted advertising, then there has to be a subscription or registration mechanism so the provider knows which user is getting which ad. Sure, there's IP tracking, but that's pretty imprecise.

That makes me even warmer about our model, where the user has a real economic incentive to let us track him in realtime.

Site news

A hearty welcome back to any Pegasi who were lost during the relaunch of the site-- Pegasusnews.com now directs you to our new home on the web.

Practicing what we preach

In the spirit of open-source Journalism, an anonymous logician points out some flaws in yesterday's post on the Belo Layoffs:

I hope your math improves between now and when you start your own publication. The Belo layoffs have either happened only in the last few days (TV) or won't happen until sometime this week (DMN). Which means those people to be laid off are still working and have been collecting their pay for the entire month of October so far. Which means you can't annualize them out as if the cost savings were their entire salaries for Q4.

Do 15 secs of research:

Belo ... believes the job cuts will save $16 million a year.

It's not clear whether they're talking about the 250 number or the 350 number. Either way, that would mean cost-saving per layoff (salary plus benefits) of $45,700 to $64,000.

Yowza. Now I know how Tim Rogers feels.

Our critic is mostly right. My response:

Hoorah! Our first critical comment-post.

And mostly correct at that. True, there are folks still working and the quarter is well underway. BUT, that doesn't account for the 100-plus unfilled positions that have been unfilled for quite some time. Those would more than make up for the time-lag you mention.

I probably should have been clearer that my math was "back-o'-the-napkin," and my larger point isn't that the DMN pays for shit, but rather that there's so much doublespeak in those numbers that it's hard to tell which end is up.

Also note that our numbers aren't even that far apart, since I was taking out an allowance for benefits when guesstimatng the salary numbers.

In other words, it was a poorly thought-out, hastily dashed off post with a basically correct conclusion, but shoddy methodology. Forunately, in a Journalism 2.0 environment, the mistake becomes part of the story and we roll on, with the errors transparent to all.

Meantime, the deathwatch rolls on.