BBC Aims to Expand in Middle East

The BBC has big ambitions in the Middle East.

Following on its launch of BBC Arabic last year, the BBC plans to be a major producer of original Arabic content.

Creating market-specific content will require new partnerships with local production, media services and marketing firms. In other worlds, big opportunities for local media companies in major Arabic markets.

When BBC's plans are seen in the context of recent investments by News Corp, Google and Yahoo, one thing becomes clear:

Big Media expects big business in the Middle East media market.

Attention Big Media: The Ultimate Lesson from CraigsList

Media companies are suffering the slings and arrows of online competition for eyeballs and advertising dollars.

CraigsList seems to be the villain of choice, given its outsized role in the collapse of classified ad revenues, the traditional mainstay of newspaper profits.

While simultaneously trying to vilify and emulate CraigsList, most media companies fail to appreciate its ultimate lesson.

CL has plenty of flaws—mainly because it so accurately reflects the imperfections of the masses using it. However, it enjoys spectacular growth while remaining stubbornly committed to a simple (even outdated) design.

The lesson is simple: Pay constant attention to what your users are telling you.

Customer service is the Qi of CraigsList. It is what energizes and sustains its massive community of users.

It also pays.

Excellent customer service breeds customer loyalty. And that makes your content and services more valuable over time while driving down costs.

Don’t know what your users think of your content or services? Then you have found your primary problem. You.

CraigsList, by eliminating marketing, sales, and business development, has eliminated every layer separating its programmers (who run CL) from the users they serve.

No layers = no sound barriers.

User feedback reaches the people who operate CL unfiltered. This can be a painful experience for managers, programmers and writers. But it is irreplaceable if you want to win your customers’ loyalty (and page views).

CraigsList famously responds to annoying complaints with haikus. In this case, their advice to other media companies might be:

Steam rising from rice
User feedback clearing your
Confusionism

Online Advertising Hit, But Print Advertising Got Floored

Media executives may see recent data on advertising revenues from the Newspaper Association of America as a good news / bad news situation.

They would be wrong. It’s all bad news.

Newspaper ad revenues are down 29% during Q2 of 2009. Obviously bad news. But even their online ad revenues had a double-digit drop of 16%.

So what’s the good news that publishers see? The worst is behind them. Wrong again. The worst is still ahead.

The recession only explains half the loss in print ad revenues. The rest (about 13% of the loss) is pure erosion of the print newspaper business model.

As newspaper publishers search for an online news model that can sustain their revenues and newsrooms, they must apply basic investment strategy … diversify, diversify, diversify.

If you are only business is news, you are heading for a cliff. Yes, you need a digital platform for news. But you also need platforms for other categories of digital content. Either build them, buy them or merge with other companies that already have them.

Yahoo Grabs Big Piece of Middle East Internet Market

Eventually, global Internet companies would realize the Arab world is one of the last underdeveloped frontiers for digital media. That day was yesterday. Yahoo bought Maktoob.com, the largest Arabic online portal, for an undisclosed sum, reportedly around $100 million.

This is a big deal. Even Twitter is a buzz with the news.

The Arabic speaking world of Internet users has not been completely ignored. Google opened it first office in the Arab world in 2006, and is the top search engine among Arabic users. Already 8% of Facebook's user base is in the Arab world. Yahoo is not the first major equity investment in a portal in the Arab world (or even a portal based in Jordan). Intel Capital recently invested in Jeeran, a Jordanian based social network with 1 million members. And that was Intel’s seventh investment in Middle East digital media. Last year, Vodafone Egypt bought Sarmady Communications (Sarcom), a digital content company based in Egypt.

But with this deal, Yahoo landed the biggest digital media acquisition to date in the Middle East. Yahoo calls it their biggest geographic expansion in years. I call it a very smart move. Maktoob has been the #1 Arabic website (in terms of users) for years, steadily growing organically and through a series of regional acquisitions. Its acquisition was inevitable. The only surprise is that it took so long. Maktoob has been around for almost 10 years.

320 million Arabic speakers worldwide, but only 1 per cent of all online content is in Arabic. That math adds up to outsized growth as the online advertising market catches up with the rapid rise in Internet penetration and usage in the Arab world. This deal alone may drive increased online advertising in the Middle East, as well as accelerate the shift away from newspapers and print advertising.

So Maktoob becomes Yahoo Maktoob at the price of $6 per user ($100 million for 16.5 million users). Although Middle East entrepreneurs will envy the valuation and the newly minted millionaires among them, that price will look dirt cheap one day. And that day is today.

Murdoch to Create the OPEC of News

Rupert Murdoch has a new idea to make news a paying business again. Call it the OPEC of news.

News Corp is pressing to create a consortium of premier media brands—including the New York Times, Washington Post and Hearst—that charge for online news.

Can this latest effort to re-monetize news work? Assuming it survives antitrust review, can a handful of major media publishers shift the entire digital news market?

The theory seems simple: combine the biggest, most trusted names in the same “walled garden” and people will pay to play, by subscriptions or micro-payments. One cartel, one low price.

But news is not oil. News is not a pure commodity that can be refined into a product with a uniform value regardless of the producer. Can every news producer (or even most) be the Wall Street Journal? Doubtful.

Also, right now, oil has minimal competition. Alternative energy remains more expensive and lacks an efficient distribution network. Online news accessible via the Internet and mobile devices is ubiquitous. Online news sources, aggregators and re-posters are endless, and offer an attractive price point: free.

Online news is sunshine, available almost anywhere. And we the readers are walking solar panels.

The WSJ and a few others like the Financial Times occupy a privileged place in the news space. Frankly, their product is worth more. It is timely and quantifiably valuable, both to readers and advertisers. Indeed, a consortium of premier news brands may prove more valuable for increasing ad dollars than generating reader revenues.

Newspapers are definitely interested in consortiums. In four short months, Journalism Online’s payment platform for digital distribution of news has attracted over 500 newspapers.

Still, I suspect that few news organizations have a critical mass of readers who view them as indispensable, and are willing to pay. An oligopoly of premier news publishers may save those chosen few. That is no guarantee that most publishers, even if collected into a broad consortium, will attract enough paying readers.

YouTube Can Live Without Big Media

The legal battle between YouTube and Big Media just received an interesting piece of evidence: videos with copyrighted content (like Daily Show clips) do not dominate YouTube viewership. This is not good news for Viacom and other Big Media companies suing Google to prevent posting of copyrighted video on YouTube.

Big Media's copyrighted videos that were removed by YouTube comprised 9 percent of all videos on the site. And, surprisingly, those videos represent only 6 percent of total views. Yes, some copyrighted content surely remains on YouTube with less obvious tags making them more difficult for copyright holders to identify and demand removal. So those numbers are a bit higher in reality. But likely not orders of magnitude higher. If clips are under the radar of copyright owners, they are probably under the radar of YouTube users as well, not making any most viewed lists or generating many hits.

Even if copyrighted videos are 12 percent of total views, the vast majority of YouTube users are not watching Big Media content. This may not slow Viacom's lawsuit against Google, as one Wired News commentator said, but it may slow Google's willingness or need to settle. Google could remove all Viacom's content and go on its merry way, still enjoying robust and growing usership. It has past its tipping point.

In fact, stripped of Big Media content, YouTube's business model and usage might evolve even more rapidly. Instead of becoming the iTunes of Big Media video clips, who knows what YouTube could morph into? Or it may lead artists to re-think deals with Big Media companies that blocks their content from reaching the mass audiences on online social networks like YouTube.

Categories: media, YouTube

Are Newspapers Dying?

The Internet is killing newspapers. It is not a sudden demise, but more a death of a thousand cuts -- loss of readers (eyeballs, in online lexicon), classified ads and subscriptions. Is there any way for newspapers to compete against Craig's List and the headlines-on-homepage habits of consumers?

One newspaper publisher in Norway found an answer, and makes piles of money online. It did have the advantage of moving fast online in a small market, quickly becoming a big fish in a small pond. But it also did other things right -- including, most importantly, re-inventing its business model and hiring managers from outside the newspaper business. It built or bought links with other publications. It started giving content away for free and moved its classified ads online.

There are lessons here for other newspapers, other businesses and even governments in how to adjust to life (and business) in an online world ...

1. New leadership and management is often needed -- people not tied to the organization's old business models. The Consumer is king, not your old business model.

2. Recognize that you are selling services more than content.

3. Trust remains a key asset. Consumers prefer to source information and services from people (and brands) they trust. This is especially true online given the amount of garbage and scammers on the Internet.

4. Use trust to get online visitors coming to you directly, and not just through a search engine. Partnerships linking you with other visited sites can help get visitors through your front door, as opposed to the back door via a search engine.

5. Keep costs down. Providing services online can be very profitable, provided you take advantage of the cost savings that business online allows.


Categories: consumers, media, Internet