Journalistic entities are moving towards becoming product companies, offering products that turn content into marketing. As a side effect, this creates businesses that follow Jack White’s theory of control: vertically integrated, creating content that markets a product that markets the content that markets the product all over again.

Like USA Today selling its data, POLITICO making a bookstore, my local public radio station selling membership or TechCrunch launching Disrupt. Publishers that successfully turn their content into brand building and marketing for a product are the ones that are surviving.

Sean Blanda — The inevitable collision of journalism and everything else

Then, Nieman Journalism let Vadim Lavrusik publish essentially marketing copy about how journalists can use Facebook’s Pages product. For free. In exchange for the ability to run ads against your content.

To this, I said: “I’m sorry, but journalists getting in bed with Facebook is the mother of all bad ideas. See: http://db.ly/103 Shame on you @niemanlab“

And: “Newspapers sell display ads, last I checked. Facebook has a many billion $ valuation from its display ad biz. Therefore = ?”

And: “‘Here’s the problem: journalists just don’t understand their business.’ I couldn’t have said it better myself.”

And: “Yo journos: How much cash will Facebook give you when it goes public with a $50+ billion valuation? My bet: a lot less than Arianna did.”

Now Paul Bradshaw, a prominent journo-blogger in the UK, has decided to use Facebook’s Notes product exclusively for a month. Vadim, under the Facebook for Journalists moniker, explains:

But to answer your question, you should reference the terms. You own your content. Facebook gets a license so that we can put ads next to it. Not dissimilar from other companies.

Ah, referencing ever-changing terms of service. If you aren’t the customer, you’re the product. Writing these points out on territory I control so I can point to it later.

* people cost a lot less than printing presses

The lunch session at SPJ’s Building a Better Journalist conference today was YAPOTFON, or Yet Another Panel On The Future Of News. Conversation was facilitated by President-elect Hagit Limor (@hlimor).

DJ Wilson is the President and General Manager of the KGW Media Group in Portland. “More than ever, people are consuming media.” Part of it is the 24/7, anytime, anywhere demand from consumers. KGW is a content business that works to meet that demand.

Rita Hibbard (@rthibbard) is the executive director and editor of InvestigateWest, a reporting non-profit in Seattle started by ex-Seattle Post-Intelligencer staffers. The bad news is the sheer number of journalists that have been laid off; the number of credentialed reporters in Olympia, Washington has gone from 25 to 6. [Ed note 10/25: This may also be due to waning interest in covering government] “Readers and news consumers are starting to wake up to what’s being lost out there.” We’re not replacing the investigative troops, but figuring out new ways to get the job done. InvestigateWest is brand new; incorporated in May, website launched in July, and first story will be out next month. It’s a piece on the misuse of public lands. They generate original, high-level investigative content. The business model is to syndicate it to as many media partners as possible, not build up their website. The first grant InvestigateWest received was from the Bullitt Foundation, which hasn’t traditionally funded journalism.

“Collaboration is a big part of this new media ecosystem.” InvestigateWest is working with a number of media partners in ways that would not have happened five or ten years ago. “The era of one dominant media source in a community is over.” News will now be an ecosystem of many parts.

Steve Woodward (@nozzlsteve) is CEO and a co-founder of Nozzl Media. Nozzl Media is a startup that builds tools for news organizations to provide real-time, personalized streams of information to their audience.

“A lot of people in newspapers thought the internet was a fad and wouldn’t go away. When it persisted, they didn’t understand why it persisted because they didn’t use it.” It’s important, Steve argues, to learn from the past. Newspapers have moved online, but they aren’t learning new tricks. Display advertising online is forecasted to peak this year and then decline. Newspapers need to think seriously about video ads, search ads, and other formats for helping businesses get their message out.

85% of all potential advertisers in any given market are never contacted by ads salesmen. Most are just going after the same 15% over and over again.

“Be the competition,” Steve argues. Sales staff should act as an ad network now. Sell ads for your competitors too, to allow the client diversify the platforms, and take a cut of that.

Abraham Hyatt (@abrahamhyatt) is the founder of Digital Journalism Portland, an award-winning journalist, and currently working on a year-long research project looking at innovation on mainstream media websites.

Abraham hates the phrase “the death of newspapers.” It’s a crutch, he says, that polarizes thinking and limits the realm of possibilities. The really interesting examples of innovation are the super-local shops. The one or two person news organizations that are experimenting and have a willingness to fail. “It’s the little guys that are weaving together a tapestry of innovative ideas.” They’re the ones that are going to shape the future of news.

DJ says that technology is driving the core of what they do. On a business side, they’re balancing revenues with expenses and using technology to keep up. Abraham mentions that small groups are the ones that are nimble enough to try experiments and DJ says there are multiple groups within KGW doing this. She also believes that there will always be money in producing content; it’s a matter of figuring out how to deliver it on all of the platforms.

What are media sites doing well? Abraham has been pleasantly surprised by the number of organizations that are making money on mobile. They aren’t making money on their content, rather they’re building different consumer applications. DJ says that KGW is doing a lot to optimize their video delivery on their website. They’re also generating revenue by working with many businesses to offer coupons, and then taking a cut from any sales generated. Steve hasn’t seen much innovation from newspaper websites. “They have a lot to learn from tech companies.” The Palm Pilot was very successful in the 1990′s because they spent a tremendous amount of time measuring shirt pockets. This is called “form factor” and is really important. Newspaper companies don’t think about form factor. “No one under the age of 40 likes broadsheets, they like tabs… Why aren’t there special coffee shop versions of the paper that are more tailored to the experience?” Newspapers, Steve argues, need to invest in significantly refining user experience, both on the web and in print. They redesign at a drop of the hat but nothing ever changes significantly.

Arrived a few minutes late to Digital Journalism Camp, organized by Abraham Hyatt, and these are my notes from the first session about news entrepreneurship in Portland. Steve Woodward and Carolyn Duncan, of the Portland Ten, led the session.

Steve Woodward of Nozzl Media argues that the drop in newspaper revenue is a metrics problem. Newspapers need to work more with metrics and be able to prove their value such that they can reengage their advertisers. The tools for metrics in print are much less than the tools for metrics online.

Discussion about Perez Hilton. Carolyn Duncan asks “who the hell was this guy three years ago?” Chuckles from the audience as someone asks “who the hell is this guy now?” The same guy asking that question follows up with “if you want to be in this business, trust is the word. If you don’t have trust, you’re not going to make a dollar.”

Pete Forsyth on trust and citing sources on Wikipedia: “you want to have a clear, transparent editorial process.” The producer of the content has to adhere to a published set of standards that others can audit.

From Aaron Weiss, “TMZ adheres to a different set of ethics than CNN because it pays sources for information”. Reaction to that is that “it’s a mistake to think that all bloggers don’t follow a editorial process.” There’s a layer of news gathering right now that’s figuring itself out.

Nozzl Media is at the state of figuring out what the users want by asking them directly, instead of having conversations with other journalists about what the users might want (which is what is happening in this session). 100% of respondents didn’t want advertisements but did want to learn about deals offered by different businesses.

Kristin Wolff: “It’s an exchange. There’s an important element to this exchange and that is disclosure.” Transparency is the new objectivity. Bloggers offer this objectivity and are more open about who their advertisers are and how they are paid. The advertisements with the Sunday newspaper are just dumped into the recycling.

Steve Woodward argues that the local advertisers who don’t normally advertise in the newspaper (because it costs too much) are much more savvy about Google AdWords, etc.

Aaron Weiss asks why isn’t anyone at the bigger news websites in the Portland area trying to figure out the technology to sell more targeted ads? Carolyn Duncan argues that it’s because it’s not anyone on the business side’s core competency.

Ken Keiter says that it’s important to remember that large companies like KGW bring in outside companies to figure out the new advertising technologies. They don’t have the technical competency in-house to do the innovation that’s necessary to do more targeted advertising, invent new revenue streams, etc.

Question from the audience: what are the solutions you guys are thinking of? Some discussion about innovation at the Oregonian. Steve Woodward points out that this is one of the only rooms at The Oregonian with whiteboards in the newsroom. The Oregonian needs to invite more creative people into the building because “the business model has blown up like an IED.”

David Cohn pegs a newsroom as a cafe where people can hang out and, through food and drink purchase, provide an alternate source of revenue for reporting. Twenty percent of every coffee you bought might go to reporting in your local community, or something like that. For Steve Outing, the newsroom as a cafe is a place for your people to connect so that you can have greater access to your community. Both of these are pieces of a bigger picture that’s been stewing in me for a couple of months; dessert and beer at the Pied Cow on Belmont last night provided a photograph to illustrate my idea.

It’s not just about using a different industry to add to reporting revenue, but rather repositioning the news organization as the information hub for the community. The newsroom as a cafe should be an 18th century salon, or space for the leading discussions of the day to take place, ferment, and spawn action.

Mark this idea as incomplete until I can start working on it. At the moment, I think it would include:

Realtime data streams about the community on the walls. Twitter, Flickr, and every other service that expresses data against geography in some regard. The reporting work done by the news organization and stringers would come in realtime as well; see the reporting as it happens. You could build an app that visualized the trending topics of the aggregate of those services.

Editorial meetings that are open to the public. Highly-engaged members of the community can come in and participate in the process to decide what gets reported on each week. All of the possibilities are generated beforehand with a kickass web app where authenticated people help identify all of the things that need to be reported on in the community (i.e. information that needs to be generated).

Workshops for community youth on hacking new tools to mash up regional data. Part of the attendance requirement would be that they then have to give a presentation back to the community on how they did it.

Equipment rental. Members can check out audio recorders or digital SLRs to cover the local city council meeting.

Chai, but not the spiced kind. Just straight up black tea, milk, and sugar.

Note: this memo is open in the sense than anyone can read it, but also in the sense that you damn well better steal these ideas.

Value experimentation with new business models

As Ryan Sholin says, the business model is the elephant in the room. Let’s take this one step further: the value proposition is the elephant in the room. A basic rule of economics is that if you create something of value, you can monetize it. To paraphrase Douglas Rushkoff, money doesn’t make good journalism, good journalism makes money. Let’s take a look at the past. In the era of the print product, it was acceptable for a reporter to rewrite an article off the wire because their audience generally had access to that content in one place: the paper. In the era of an increasingly ubiquitous internet, these duplication efforts can actually diminish a news brand. Link to it instead of rewriting it. Add value first.

Once you’ve started eliminating redundancies in your product, understand that there is a forward direction for news organization business models and there is a backwards direction. Forwards is experimentation, uncertainty, and hard work. Backwards is trying to impose old business models into a new marketplace. Forwards is creating legitimate value for communities that both the community and the news organization understand. Backwards is attempting to devalue the internet in favor of the physical print product. Forwards is educating your clients of web advertising’s inherent advantages. Backwards is not letting your clients buy an online ad unless they buy a print ad. Forwards is increasing your quantitative data about all different segments of your market, and selling your services against that information. Backwards is trying to justify the value of “one size fits all.”

Redesign the newsroom for the digital age

We’re entering the age of quicker and quicker innovation. To remain competitive, most traditional newspapers will have to completely redesign their newsrooms. The past was hierarchy and bureaucracy whereas the future is flat and distributed. I’ve heard stories where content to be published on the website has to be emailed to one or two Online Editors for placement. In 2009, that’s called a bottleneck. Instead, the editing and publishing process should be a frictionless digital flow. The newsroom should be space in which bottlenecks aren’t tolerated and where efficiencies can happen organically.

Nimble can be incremental. In addition to flattening the architecture of the newsroom, get your staff to expect constant change and have them be on the lookout for new trends and ideas. Encourage them to experiment, and have them report on successes and challenges with a blog dedicated to the changing newsroom. Critically discuss those ideas during regular meetings. Do not be the news organization that forces its employees to talk about innovation off company time. Do be the organization that invites local thought-leaders from different sectors to come in and give presentations during lunch to introduce new ways of thinking. Talks@Google offers a good example of this approach. Within the reporting process, have reporters save links to supporting documents, articles, and content, and publish those links as such when the story goes online. Make information curation on the web a part of their workflow to lower the friction in adopting this approach.

In my opinion, the Cedar Rapids Gazette appears to be an organization that is taking the right approach. I still haven’t had the change to read the entirety of Steve Buttry’s epic Complete Community Connection and am wary of plans to create local portal websites, but I believe they understand the need to be nimble and platform independent.

Change your audiences into communities, your product into a process

Embrace your community, they are core to what you do. Flatten your organization and make it a hub for innovation, creativity, and intelligent conversation.

Pragmatically, this can take a number of different shapes. Online, social networking websites, with Twitter and Facebook being the most popular and relevant at the moment, allow your reporters and editors the opportunity to increase the breadth of conversations they have with their community. Translate that breadth into depth. Even if they don’t have much of a following, reporters can use Twitter as an open, participatory notebook. I’ve personally found that I’m much more attentive to an event if I’m trying to synthesize the major points into 140 character summaries than if I’m just trying to take notes freeform. Twitter can also be a tool for distributed critical thinking; pitch a fact to the crowd to get a sense of the different perspectives on the issue. Most Facebook users add information to their profiles that can make the service a granular, self-managing rolodex. On the news organization’s website, journalists should engage in discussion on their articles and other articles within their beat. Think of your newsroom as a cafe, or an 18th century salon where the important conversations of the day take place. Make components of your news brand, online and off, the central hub around which this discussion takes place.

Remember that the strength of your relationship with your community helps defines your value in any business model.

Hire a few developers and go open source

Your platform for content delivery, let it be the print product, your website, or mobile applications, is the engine for your business. News organizations need to treat all platforms with respect. Moreover, your web presence is as important as if not more than your print product now. It may not be the platform that receives the most readership at the moment, but most newspapers got themselves into the backward positions they’re in now because they were being reactive. They need to be proactive on the web. News organizations should run, maintain, and develop their own websites in house.

There are two ways to do this that go in hand. First, hire a few web developers to regularly develop against your website. Of the things going unmentioned in this “newspapers are dying” conversation, one is that newspapers have consistently shot themselves in the foot with is not applying enough talent, resources, or creativity to the web. Some are just now beginning. The staff required to build, maintain, and develop new features for your website is as important if not more than your production staff. Most newspapers don’t act like this right now, and that’s why they’re newspapers and not legit news organizations. In fact, the local paper in my area, The Oregonian, created an entire second company under a different name for their online product. In addition to the technology and workflow problems, it has completely fragmented their brand. You need to hire developers, and those developers need to be included in the newsroom. This can be done incrementally, too. Hire a developer to set up blogs for your newsroom using the open source blogging platform WordPress, or similar project and expand from there.

Second, go open source. The problem with proprietary vendor platforms is that they get to choose the core characteristics of how your web platform runs and operates. A print analogy: outsourcing your newspaper design to an independent company that doesn’t really understand or care about delivering information to your community. Functionality is a product of design. All the vendor cares about is beating you over the head with their crappy content management system and stealing your money (or advertising revenue in the case of college media). Take control back. Furthermore, open source offers another distinct advantage: you now have access to hundreds, if not thousands, of innovative minds working to improve the software. Proprietary can’t match the explosive innovation offered by open source.

And with that, best of luck. Let’s get hacking.

Let’s take this one step further. In addition to allowing the community to pitch assignments, they should obviously be able to use a currency to vote on which reporting projects actually move forward. It doesn’t need to be an “official” currency, however; the money that the community uses to green-light journalism assignments could be the same that they use for economic transactions within the local geo-space.

It is highly unlikely that newspapers will reclaim the monopoly they had on classified advertising pre-internet. They controlled the platform before the internet, and were able to dictate what information used their print pages to gain readers and audience. Some newspapers have lost control of the platform completely and the ones that haven’t will follow suit. Newspapers won’t be able to reclaim the classified advertising space by using the old mental framework for thinking about classifieds, by pretending they might be able to own the platform and charge access to it. Instead, it’s imperative to take the approach of hacking the platform and adding functionality, value, and convenience.

Remember Friendster? I don’t. I never had an account. It was upstaged by MySpace, where I had an account for a few months before it became uncool to do so. MySpace was then upstaged by Facebook. Yes, I’ll concede that MySpace has a large userbase, but its value in the mindspace of the users is rapidly diminishing and there’s a big need for creativity. Fortunately for everyone involved, there’s a low barrier to disruption on the internet.

The real way local news organizations can upset Craigslist and build a better classifieds is simple: create a micro-currency. In addition to providing a more user-friendly interface and the ability to add better meta data, news organizations with a specific geographic community should establish a currency to “monetize” the local marketplace. As Douglas Rushkoff says, the web, and web 2.0 especially, is breaking existing institutions because it allows people to create value on the periphery again. Local news organizations are in a unique, and therefore advantageous, position to provide the platform with which to capture the value of local transactions.

First, you must remember that what you’re trying to is facilitate a marketplace for your meatspace community in the digital realm. Classifieds aren’t just about selling stuff. They can also provide a platform for loaning material not currently in use. A micro-currency would be crucial for those minor exchanges that don’t necessitate the use of a global currency. For instance, I’ve got a paddle that I haven’t used in the last six months because I sold my kayak just over a year ago to raise travel funds. I don’t necessarily want to sell it because I intend to start kayaking again this summer but, in the interim, it’s sitting in the corner of my room. With a well-designed and executed classifieds system, I could be loaning out the paddle. The classifieds system would facilitate the exchange by allowing me to publish that I have a paddle available to loan, my location, my trustworthiness, and other metrics to increase the likelihood of a successful loan. Adding a micro-currency to the exchange would allow both the loaner and loanee to capture the value, and then allow me to use it for something else (like my friend Ben’s 70-200 f2.8 lens). Having a local currency backed by the local news organization, along with a better way to manage transactions digitally, would increase the likelihood of local economic activity taking place.

In order to make the platform trustworthy, the social graph would be a key factor as well. You’d be able to review the exchanges in an open and honest manner, and only lend to trusted friends and friends-of-friends. The news organization would act as the moderator to make sure both parties were satisfied with the transactions. You’d be able to buy into the local currency or do valuable work within the local marketplace that would earn you credit. For instance, volunteering a certain number of hours for a local non-profit or library, something that provides value almost exclusively for the local community, could give you currency to borrow items, gain access to exclusive events sponsored by the news organization, etc. A micro-currency powering a geographically-bound marketplace could also incentivize better crowdsourcing of local data, news, and information. The news organization could “pay” people to report the current milk prices from all of the local groceries, or ask specific questions of local politicians.

“Hyper-local” is the future of the institutions that currently think of themselves as newspapers. Hyper-local isn’t just content, however, and establishing a trusted currency to power a local marketplace is one critical idea for reinventing classifieds.