Sunday, May 3, 2009

Journalism vs. Marketing

The New York Times ran an obituary this morning for Encarta, Microsoft’s erstwhile multimedia encyclopedia. Since its introduction in 1993 for $395, Encarta was subsequently marked down to $99, $29.95 and most recently $22.95. Microsoft will soon cease selling and shut down its web site.

Yes, Encarta was done in by Wikipedia, but even more so by Google. As the Times observed, “Microsoft soon learned that the public would no longer pay for information once it was available free.”

During Encarta’s slow demise, Microsoft was started counting less on sales receipts and more on embedded advertising. You could read carefully researched articles but you had to endure vendor product pitches. Sound like your typical magazine or newspaper? They also rely heavily on ad revenues, since readers are increasingly disinclined to pay for subscriptions.

But a parallel logic, unfortunately, also applies to advertisers. Why pay a fortune for expensive print advertising when you can reach more people more cheaply with online ads? OK, you have a problem with metrics, but here you have a potentially interactive medium that can generate sales leads, something that’s hard to match in print. And it’s cheap.

That logic is killing print, both newspapers and trade magazines. Quite frankly, I don’t see a way around it. The problem then becomes, how do you make money online, where you’re essentially trading print advertising dollars for dimes? This is the $64,000 question that’s consuming everyone in the publishing industry. I don’t claim to have the answer, but I do have a provocative suggestion.

I think vendor-based magazines—whether print or online—are the future of trade publications.

The publishers who put out the trade mags you read have long made a bundle on “specialty publications,” or magazines they produce on contract for individual vendors. Their editors frequently contribute articles focusing on the vendor’s technology or even products, walking a fine line between editorial integrity and pushing marketing bullet points. The editors are never comfortable doing this, but it puts food on the table.

I think this is a growing trend, and an increasingly honorable one. Mentor Graphics puts out EDA Tech Journal, which is well read and well balanced—with kudos both to Mentor and my old colleague Paul Dempsey. Mike Santarini, since being laid off at EDN, has started publishing Xcell Journal for Xilinx—a very slick magazine. And Rich Goering didn’t stay unemployed long before being snatched up by Cadence to start an e-newsletter for them, which I’m sure will retain the same high standard for which Rich has always been known.

I hate to say it, but I think Rich Goering and Mike Santarini are the future of publishing, which will be vendor driven. The online world is full of new sources, very few of which are making money. Yes, a lot of them are dreck, but that's how it works. That also means that there's room for trusted gurus, if they can just figure out how to make a living.

I see a wide range of online tech news sources, with a smattering of guru blogs that people trust. The blogs will be well supported by advertising, but not enough to support the overhead of a big publisher. All the major semiconductor and EDA companies will have their own online magazines, employing the best editors.

Journalism will slide farther down the slippery slope toward marketing, with the best editors—with the blessing of the more enlightened vendors like Mentor—still having a lot of latitude to express their occasionally acerbic opinions.

They’ll just be working within a smaller box.


Lou Coveyu said...

History is often circular. The ownership of media has gone from corporate to public to religious throughout history. I believe we are looking at a new cycle. I'll be writing more on this within the week. But we are seeing nothing really new.

John Donovan said...

I tend to think of events as moving more like a pendulum (v. Spengler) than a circle, but basically I agree. This is a dynamic tension for which there is no resolution, only an ongoing balancing act.