The Praized Blog

Digg.com, the social news site, did a major algorithm update last week to tweak the way submitted content get to the front page of the site. As Kevin Rose explained, “As we’ve talked about in the past, Digg’s promotional algorithm ensures that the most popular content dugg by a diverse, unique group of diggers reaches the home page. Our goal is to give each person a fair chance of getting their submission promoted to the home page.”

(Flickr picture by donlbe)

The reaction from Digg power users was scorching. Wired explains: “For those who missed it, several of the top diggers – including Andrew “MrBabyMan” Sorcini, Muhammad “msaleem” Saleem and Reg “Zaibatsu” Saddler, held an emergency chat/podcast to discuss their response to a recent change in the Digg algorithm which made it more difficult for veteran Diggers to get their submissions on the front page. After nearly a couple hours of debate, it was decided that they would boycott the site. They backed down from the plan, though, when Digg founder Kevin Rose and Jay Adelson showed up and talked them down from it.”

Now, why is Digg constantly updating their algorithm and making their power users angry? Let me explain…

Since their launch, Digg’s mission has been about democratizing the news by using the wisdom of the crowds. Jay Adelson repeated it a year ago in the company blog “Our goal is always to maintain a purely democratic system for the submission and sharing of information - and we want Digg to continue to be a great resource for finding the best content.” In addition, there have been multiple rumors around traditional news media firms wanting to buy the site. If you’re in traditional media, what’s sexy about Digg is that promise of real news democracy. It’s a very noble mission but, unfortunately for Digg, the site is currently not a democracy. It’s an oligarchy, where home page results are controlled by a few hundred individuals. If you’re not part of the “Digg club”, getting an article to the front page is a very difficult task. And no traditional media firm will want to buy a site that’s controlled by a small group of people, especially not for $300M (one of the rumored prices). So, for Digg.com, it’s “Democracy or Bust”.

Update: someone suggested we submit the post to Digg to prove (or not) the point. Here it is, if you want to “digg” it.

Update2: “Slashdot Founder Questions Crowd’s Wisdom” in the New York Times.

I love that slide coming from Chris Tolles‘ Web 2.0 Summit presentation. Tolles is the CEO of Topix, a well-known hyperlocal news aggregator. It clearly shows why Topix decided to allow user-generated content in their site back in April.

In it, he tries to extrapolate the number of daily local news stories coming out of traditional media outlets (newspapers, radio and local TV) and comes up with a grand total of 22,293. Given that there are about 43,000 zip codes in the US, this means every zip code gets 0.5 stories per day on average. Not much if you’re trying to build zip-code driven news aggregator. Smart move.

(seen in Mediapost’s OnlineMediaDaily this morning)

In order to succeed in the long run, content producers must acknowledge the importance of blogs, portals, and aggregators in connecting with their audiences, according to a new JupiterResearch report, “Networked Media: Thriving In An Intermediated World.” The report points out, for example, that 57% of 18- to-24-year-old Internet users get their news from portals versus 21% from cable news sites–and online users now trust portals nearly as much as traditional news media.

“To thrive on the Web, news sites must become more network-focused and aggregate content from other sources while distributing their own content through intermediaries,” said David Schatsky, president of JupiterResearch. “By paying closer attention to the tendencies of the end user, these sites will be able to evolve and meet the needs of a wider online audience.” “Not only must content producers embrace intermediaries to serve their own audiences and reach out to new ones” explained JupiterResearch analyst Barry Parr, but “they should exploit opportunities to become intermediaries for their core audiences.”

What it means: I think the recommendation above applies to most (if not all) content producers. First, they need to become curators of content (aggregation within editorial guidelines) in addition to creators of content (dixit Ted Shelton). Second, as the web is much more fragmented than the offline world, it is critical to atomize the content to distribute it to other web sites to increase the total reach.

Catching up on some interesting blog posts this week, I found this superb analysis by Publishing 2.0 about why newspapers should embrace online aggregators.

Highlights:

What it means: a couple of things. First, if you are traditional media, you need to re-think how you see your brand. There is a retail version of your brand (your destination sites) and there is a wholesale version of your brand (rss feed, SEO strategy, content licensing, etc.). Both are as important strategically. Second, the idea of branding content pieces in addition to your destination site is brilliant. Make sure you take that into account when working on your wholesale strategy. Finally, embrace search engines and aggregators to increase your reach.

(via Mediapost & Hearst-Argyle press release)

Hearst-Argyle (a US television station owner) has cut a deal to distribute video clips on YouTube, the companies announced today. With the arrangement, news, weather, and clips from other local programs in five markets - - Boston, Manchester in New Hampshire, Sacramento, Pittsburgh, and Baltimore - - will be available on the video-sharing site, as well as clips of high school sports, among other material.

While this deal appears to mark the first time YouTube has made a deal for local video, the company has allied with NBC and CBS in the past. As recently as March, CBS tapped YouTube to create an NCAA channel for streams of the basketball games.

The agreement marks the first revenue sharing agreement between Google, YouTube and an independent television group.

What it means: Brilliant! To expand their online reach, Hearst-Argyle has chosen to sign a distribution agreement with YouTube, the leading video site. In addition, to motivate their distribution partner, they are also doing revenue sharing. Given that online is much more fragmented than offline, traditional media has no choice but to embrace the wholesale model. This allows the media company to sell an online product with a reach that approaches the offline one (insuring a smoother revenue transition between offline and online). I suspect that we’ll eventually see that strategy happen in the directory space as well. Given that many directory players are showing their print display ads in their destination site, it’s not too much of a stretch to distribute that content elsewhere, in decentralized online destinations. Paid distribution agreements will be part of the deal.

(via MediaPost)

According to a new Hitwise report, 25% of the traffic coming to newspapers Web sites arrives from search engines.  This comes on the heels of a custom Nielsen//NetRatings study for the Newspaper Association of America (NAA) showing record traffic numbers of 59.5M unique visitors to these web sites in March.

Challenges:

1) Monetization is not happening as fast as that traffic growth.  “While online ad revenue has been growing, our share of that revenue is not in synch with our reach into the audience,” said Randy Bennett, vice president of audience and new business development for the NAA.”

2) User fragmentation.  “Info from the Hitwise report revealed that news consumption is beginning to fragment, with the share of visits to the top 10 News and Media Web sites (which include newspapers like The New York Times) declining by almost 4%.”

Solution?

“According to Bennett, building awareness of that reach and making it easier for advertisers to buy bundles of local and national ads are key steps toward securing more ad revenue.”

What it means: as Martin Nisenholtz of New York Times Digital said this week at the YPA Conference, the “walled garden” era is dead.  Search engine optimization is a key strategic element if you run a media operation.  Search engines are entry doors to web content and because of their extensive reach, you want to be found in them.  But SEO is not enough.  You need to have a specific syndication strategy to disseminate your content, your brand and, hopefully, your business model throughout the web.

Yesterday was a fascinating day at Digg, the very popular social news voting site. After receiving a cease & desist letter asking the Digg management team to remove posts containing the key to cracking the HD-DVD encryption code, they removed the posts and deleted the accounts of the people who posted them.

Following that decision, their users revolted and started submitting the encryption code in all sorts of creative fashion. During part of the day, all the top news on Digg were about that story. Digg finally decided they would not fight the community and “…after seeing hundreds of stories and reading thousands of comments, you’ve made it clear. You’d rather see Digg go down fighting than bow down to a bigger company. We hear you, and effective immediately we won’t delete stories or comments containing the code and will deal with whatever the consequences might be. If we lose, then what the hell, at least we died trying.”

What it means: don’t underestimate the power of your users within a social media environment. Users become a much more important stakeholder in your day-to-day operations. Mashable has an interesting take on the future of this situation where Digg users could actually contribute money to a defense fund if they get sued. Mashable adds “Digg users could also significantly affect the coverage of the story on the Internet and in the press, even swaying popular opinion. An opportunity in a crisis?” Fascinating!

According to the Wall Street Journal, the newspaper industry’s online revenue growth seems to be slowing down and might not be the lifeline they were expecting. Here are the highlights of the article:

Last week, that lifeline began looking frayed. New York Times Co. warned Thursday that online advertising growth this year won’t be as strong as the 30% it had projected. On the same day, Tribune Co. reported that the growth rate for first-quarter interactive revenue was sharply lower than a year earlier. Gannett Co. likewise said online revenue growth slowed in the first quarter from a year earlier.”(…)

(…) last week’s news came as the number of online news outlets proliferates. Rival media such as TV stations and magazines have beefed up their presence, adding to threats posed by Web giants such as Google and Yahoo and popular sites such as CNN.com. Even the social-networking site MySpace has added a news feature and is boosting its ad-sales efforts. (…)

One major issue for many newspapers online: Roughly 70% to 80% of their online revenue is tied to a classified ad sold in the print edition — known as an “upsell,” says Paul Ginocchio, a newspaper analyst at Deutsche Bank. And as newspapers see a sharp erosion in classified advertising for real estate and jobs, their Web sites are being hit as well. Analysts say papers need to find new categories of advertisers. “Newspapers need to move beyond the traditional classified sources they’ve relied upon,” says Borrell’s Mr. Cassino. (…)

Underlining this pressure is a shift under way within Internet advertising. The ad formats that have so far proved strongest for newspapers — banner ads, pop-ups and listings — are losing ground to formats such as search marketing. Ad buyers say automotive, entertainment, financial-services and travel companies — all major newspaper advertisers in print and online — are aggressively shifting dollars into search marketing.(…)

What it means: here are my two cents as an outside observer (and newspaper junkie): obviously, media fragmentation online is hurting newspapers but I believe their general reluctance to embrace content syndication as a distribution/marketing strategy might be hurting them more. If you have an authoritative voice nationally or locally, you need to allow content syndication everywhere to try to drive traffic back to your site(s). Because of the lack of aggressive syndication, newspapers are being removed from the equation by news aggregators and undifferentiated content offer. I’m also a firm believer that becoming either a hypernational or hyperlocal-focussed news source will position you for the future. Everyone positioned in the middle will suffer exactly like what happened in retail with Wal-Mart. The launch of specific vertical sites (with or without a local angle) could also improve their situation. Finally, newspapers need to embrace blogging technology to improve their SEO strategy.

Update: Rich Gordon, Associate Professor at Northwestern University, suggests similar solutions: ”Instead of trying to build the best destination, build the best network.”

Via Lost Remote

The Tampa Tribune announced today that it’s cutting or outsourcing approximately 70 positions — just over 5 percent of its staff. At the same time, the Tribune said it’s planning to launch “a number” of hyperlocal and community sites as extensions of TBO.com. “Our newspaper is experiencing the challenges of changing reader needs and fundamental shifts in spending by our traditional advertisers,” said Denise Palmer, president and publisher. “We are reducing resources in areas that are in decline and investing in areas of growth, including local news and the Internet,” she said. The Tribune, WFLA and TBO.com have been a model of convergence — they share a newsroom — yet declining revenue on the newspaper side is taking its toll.

Three hyperlocal sites have already launched — Brandon News, Suncoast News-Pasco and Suncoast News-Pinellas. “Basically, we’re turning all of our zone/weekly reporters into online producers, so that they think online first and print second,” said TBO.com VP/GM Randy Coats. TBO’s staff will jump from 14 on the content side to 40+. The secret? “A pretty turn-key CMS that they run without TBO intervention.” A dozen more sites are expected to launch this summer.

Paid Content had this to say on the concept of hyperlocal: “In essence, hyperlocal sites are the online version of zoned editions, designed with the theory that people care more about “their” news than that of the entire area. Zoning in print is usually costly and doesn’t always pay off; some of the grandest zoning efforts are being dismantled or retooled for those very reasons. Hyperlocal sites stand a greater chance of success because they are much less expensive to produce and can be even more local than print editions.”

What it means: interesting analogy brought forth by Staci Kramer at Paid Content. Hyperlocal sites are the online equivalent of zoned newspaper editions. Something that makes no financial sense in print but can exist online because of the lower execution costs. I wonder if the strategy might not be to have a strong umbrella print brand in one city and go very hyperlocal online in your various city neighborhoods with a multitude of smaller branded destination sites. Print could drive the regional content while online would drive the hyperlocal one. Both medium would benefit from each other’s efforts by re-using their respective content… Hmmm… Food for thought.

Via Mathew Ingram’s blog:

Topix, the local news aggregator that is owned by several big U.S. newspaper chains (Gannett, The Tribune and McClatchy), is doing what amounts to a relaunch of the site and adding “citizen journalism” or social media to the mix, as well as moving to a dot-com domain (it used to be dot-net). Founder and CEO Rich Skrenta — who describes on his personal blog how this came out of an attempt to “de-suckify” the site — has a blog post at Topix about the changes, and says: “We’re now inviting members from our hyperlocal communities to take over the controls and help us edit the news.” (…)

Skrenta says that Topix is getting about 37,000 posts a day, and the site was looking for a way of featuring the top 1 to 5 per cent of those contributions that actually add something to the story. Now, anyone can submit a story, or facts about a story, or an opinion, or cellphone photos, and they will be handled by what amounts to an editor. (…)

At the same time, my friend Philippe Martin sends me this news about TF1 (one of the top TV networks in France). On their 1pm newscast, they will ask viewers to send them local videos using the Wat.tv site (also owned by TF1), which might afterward appear on TV.

What it means: newspapers and TV news organizations are starting to clue in on the importance of hyperlocal news and citizen journalism. It is a key success factor for them in the future.