UPDATE: The Office for National Statistics has also released some data on internet access which paints a more positive picture. Their data puts the numbers who haven’t been online at 18%. And 45% had accessed the web on the move .

I’ve just been scanning through the internet section of Ofcom’s latest report on The Communications Market 2010. As always, it’s an essential read and this year the body have done a beautiful job in publishing it online with unique URLs for each passage of the document, and downloadable CSV and PDF files for each piece of data.

Here are what I think are the key points for those specifically interested in online journalism and publishing:

1: Mobile is genuinely significant: 23% of UK users now access the web on mobile phones (but 27% still have no access to the web on any device).

Implication: We should be thinking about mobile as another medium, with different generic qualities to print, broadcast or web, and different consumption and distribution patterns.

2: 23% of time spent online is on social networks – and there has been a 10% rise in the numbers with a social media profile across all demographics. Mobile emerges as an important platform for social media access, particularly among 16-24-year-olds. Twitter is has 1m more unique visitors than MySpace, but Facebook has 20m more than Twitter.

Implication: We should have social network strategies not only around distributing content but also commercial possibilities such as embedded advertising, diverting marketing budget, etc.

3: Display advertising grew slightly, but search advertising continues to gain market share.

Implication: Not good news for publishers – the question to ask might be: why? Is it because of the mass market search engines enjoy? Or the measurability of being able to advertise against search terms? Is that something news websites can offer too – or something similar?

4: 48% of 24-34 year olds use the internet to keep up with news – more than any other age group – older people are least interested in news online.

Implication: confirms not only that our online audiences are different demographically, but young people are interested in news. What’s missing is an elaboration of what they consider ‘keeping up with news’ – that doesn’t necessarily mean checking a news website, but might include letting news come to them via social networks, email, or finding ‘news’ about their friends.

5: Google literacy - only 20% think search results are unbiased & accurate; 54% are critical.

Implication: surprising, and challenges some assumptions.

6: Google Image Search becomes a significant search engine on its own, above all other general search engines (Bing, Yahoo, MSN) apart from Google’s main search portal. Curiously, YouTube is not listed, although it is widely known that it accounts for more searches than Yahoo! I am guessing it was not classified separately as a search engine (it is, however, the second most popular search term, after ‘Facebook’).

Implication: emphasises the importance of SEO for images, but also the growing popularity of vertical search engines. A news organisation that created an effective search facility either for its own site (most news website search facilities are not very good) or in its field could reap some benefits longer term.

7: UGC is changing – there is an overall decline in uploading and adding content. “The only age group in which this figure did not fall since 2009 was 45-64 year olds, while the number
of 15-24 year olds claiming to upload content fell by 10 percentage points.”

That said, in the detail there are increases in the numbers of users who have created UGC in certain categories – there was an 8% increase in those who have commented on blogs, for example, and a 6% increase in those who have uploaded images to a website. It may be that UGC activity is being concentrated in social networks (the numbers who have created a social network profile doubled from 22% to 44%)

Implication: There seems to be a limit to the people who will contribute content online (even where there were increases, this appears to be drawn from the proportion of people who previously wanted to contribute content online – see image at top of post). And these appear to be gravitating towards particular communities, i.e. Facebook. There may be a limited window of opportunity for attracting these users to contribute to your site – or it may be that publishers have to work harder to attract them with functionality, etc.

8: News and information is the 4th most popular content category – although ‘search and communities’ are lumped together in first place. Time spent on news and information is significantly lower than other categories, however. Likewise, the BBC and Associated Newspapers both feature in the top 20 sites (along with more general portals AOL, Sky and Yahoo!) but have lower time per person.

Implication: the news industry has an ongoing ‘stickiness’ problem. People are clearly interested in news, but don’t stick around. Traditional cross-publishing and shovelware approaches don’t appear to be working. We need to learn from the areas where people spend most time – such as social networks. Research is needed into media types that appear to have a strong record here, such as audio slideshows, wikis and databases.

PHP Freelancer

A forthright post over at Boing Boing accuses Ofcom of copping out of their responsibility to sort out just where the burden of proof would fall in the Digital Economy Act’s proposals to disconnect people accused of breaking copyright laws. It’s based on an analysis by the Open Rights Group of Ofcom’s draft code.

“Ofcom’s proposal denies us the ability to check whether the methods of collecting of the evidence are trustworthy. Instead, copyright holders and Internet Service Providers will just self-certify that everything’s ok. If they get it wrong, there’s no penalty.

“The Act requires the evidential standards to be defined – but Ofcom are leaving this up the rights holders and ISPs to decide in the future. We ask, how is anyone meant to trust this code if we can’t see how the evidence is gathered or checked?”

More at The Guardian.

PHP Freelancer

On Wednesday I spoke at the thoroughly enjoyable Journalism’s Next Top Model conference at Westminster University. Highlight of the day was keynote speaker Robert Picard, a media economist able to separate publishers’ sense of entitlement from the hard realities of economics and business (mis)management.

Journalism will survive, he said, because there will always be a demand for it. But most print publishers will die because over the past few decades they quite simply haven’t managed their accounts responsibly. While a typical business should have a debt-to-equity ratio of around 1:1, some publishers have racked up ratios ranging from 6:1 to 66:1.

“If you haven’t managed your balance sheet you get in trouble in a recession. Do I feel bad for them? No. They made stupid mistakes.”

One particular mistake highlighted by Picard was the switch in the 1990s from making acquisitions with stock to making acquisitions with debt.

“All the newspapers were making profits when they went bankrupt,” he pointed out. It was their handling of debt that killed them.

I asked Robert about the government’s plans to relax (and consider removing) local media ownership rules – and whether that would indeed create the environment for entrepreneurialism they want to encourage. His response was simple: “You don’t encourage competition by relaxing ownership rules.

“They don’t understand economics,” if they thought that would happen, he continued. “We need people to start more media organisations, not merge into fewer organisations.”

Picard seemed to feel that the Dutch government’s moves to provide funds to help news organisations restructure, or to re-skill journalists, were more intelligent responses.

PHP Freelancer

I’m sat on a train on the way to the C&binet session at the Department for Culture, Media and Sport looking at the question of what the government should do – if anything – to save local journalism. Here are my notes:

The problem is not journalism

The vanity of journalists often leads to chest-beating deprecation of modern journalism. While there is some validity to that argument, it misses the point. Audiences have been steadily declining since well before the internet – that’s not what’s caused the current crisis.

The problem is not a journalism problem – it is an advertising problem, and a distribution problem.

The advertising problem is this: over recent years the market has been flooded with suppliers. This has driven the price down to a level that cannot sustain shareholder-owned print operations. In the last 12 months a sheer drop in demand has compounded the problem, and it’s widely accepted that some of that demand may never come back.

Advertising itself has changed too – from the traditional model of CPM (selling eyeballs) to CPC (selling clicks) to CPA (selling actions, e.g. purchases), and is likely to evolve further in the future towards VRM (vendor relationship management, i.e. managing the relationship between seller and buyer). I’ve seen little evidence of newspapers adapting their own advertising offerings in line to get a foothold when advertisers catch up – it’s still print-centric.

The distribution problem is that newspapers do not control distribution online – by and large their readers do, and newspapers have failed to acknowledge this, leaving themselves open to web startups that build user distribution into their design and operation. Of course the loss of control over distribution means losing the monopolies that allowed newspapers to keep advertising prices high enough to sustain the profit margins they were accustomed to. Now advertisers have choice, and the newspaper ad offering doesn’t look much of a bargain.

What does the future of local journalism look like?

I see 2 main paths of development, and both have one thing in common: the future is networked.

On the one side I see the national-grassroots-data path – I’ll call it the Networked Model for simplicity’s sake. As increasing numbers of local newspapers close or stunt their operations, hyperlocal blogs will spring up to address the gap. At the same time national news organisations enter the local market and partner with these and data-based operations. The most likely figures in this scenario are The Guardian, hyperlocal blogs and the likes of MySociety and OpenlyLocal. It’s a patchwork solution that is likely to leave gaps in coverage.

On the other side is the Local News Consortia proposed by Ofcom. Established operators like PA, ITN and regional newspaper publishers will partner up to gain access to a pot of public money and efficiencies that they cannot achieve without ending up in front of the Competition Commission. This will require some public service commitments such as covering councils and courts, and universal coverage – but fundamentally this will be Business As Usual.

More to follow in further posts

PHP Freelancer

Could the BBC be funded by a tax on web and mobile? In France President Sarkozy has just announced that, from next year,

“prime-time advertising on public television will be phased out, with the lost revenues to be replaced by taxes collected from internet, mobile phone and commercial broadcasting companies

“Internet and mobile operators will have to stump up a tax of 0.9 percent of sales—which could raise up to 380 million euros ($595 million), in support of the state-owned France Televisions, which controls the country’s four public channels. A further 80 million euros ($125 million) will come from taxes on commercial broadcasters.”

Given the potential future insecurity of the licence fee in a converged media world, you’d be forgiven for wondering how many MPs, Ofcom bosses and BBC eyes will be looking across the channel to see how and if this works – not to mention Channel 4 as they angle for their piece of the future public pie with 4iP.

Next up: newspapers call for a tax on Google. Oh, sorry, they already did that.

Your thoughts invited…

PHP Freelancer