In the news this week, Silicon Valley billionaire Peter Thiel admits to bankrolling Hulk Hogan’s lawsuit against Gawker Media; Vice Media lays off 20 staffers but plans to expand with offices in San Francisco and Hong Kong; and European Union regulators want streaming services like Netflix to fund local content. Our Metric of the Week is Twitter character counts, and our special guests are Soraya Chemlay & Catherine Buni, who wrote an eye-opening piece on content moderators at YouTube, Facebook, Twitter and other social platforms.
NOTE: In our interview with Soraya Chemlay & Catherine Buni, Hany Farid was identified as a Dartmouth College technologist. He is, in fact, a professor of Computer Science at Dartmouth.
Don’t have a lot of time to spare, but still want to get a roundup of the week’s top news? Then check out our Digital Media Brief below!
Digital Media Brief
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Mark Glaser is executive editor and publisher of MediaShift and Idea Lab. He is an award-winning writer and accidental entrepreneur, who has taken MediaShift from a one-person blog to a growing media company with events such as Collab/Space workshops and weekend hackathons; the weekly MediaShift podcast; and digital training, DigitalEd, in partnership with top journalism schools. You can follow him on Twitter @mediatwit.
Top News of the Week
Hulk Hogan lawsuit funded by Silicon Valley Billionaire
Hulk Hogan, a.k.a. Terry Bollea, won $140 million in a defamation lawsuit against Gawker Media for publishing a sex tape, a ruling that was upheld by a Florida judge this past Wednesday. The whole case was strange enough, but now comes news from Forbes that the lawsuit was bankrolled by Silicon Valley billionaire Peter Thiel. He is a PayPal co-founder, Facebook board member and donor to the Committee to Protect Journalists. Yes, it’s rich that someone supporting CPJ is also trying to take down an entire news source online through lawsuits. CPJ’s executive director Joel Simon said that his organization supports the right of people to seek damages in cases of defamation, but it doesn’t “support efforts to abuse the process by seeking to punish or bankrupt particular media outlets.”
And seeking to bankrupt Gawker is exactly the point in this lawsuit and a few others that have employed the same lawyer, with all of them possibly being bankrolled by Thiel. And Thiel has a history with Gawker: He was outed as gay by the publication in 2007, and Thiel has said that Gawker has “the psychology of a terrorist” similar to Al Qaeda. Thiel basically owned up to bankrolling the lawsuit in the New York Times, and defended himself as trying to stop a “singularly terrible bully.” Once again, it’s very hard to feel sorry for Gawker, a publication that recently has tried to change focus from hardcore gossip after outing another executive as gay. But TalkingPointsMemo’s Josh Marshall has a good point, saying it’s an ominous sign that billionaires are trying to silence publications, including a recent lawsuit against Mother Jones that the publication won. If every publication is worried about lawsuits from billionaires (or is funded or owned by them), who will be able to take them on with watchdog reporting?
Next up: Vice Media Lays Off Staff, Plans to Expand
Typically when a media company lays off staff in a reorganization, it’s a sign of trouble. And that’s likely the case when the New York Times announced another round of staff buyouts recently. But for digital media upstarts, layoffs also signal a change in tactics. And that’s usually a move to cut text and add video. That’s the case with the recent layoffs of 20 people at Vice Media in the U.S. and U.K., including two foreign correspondents, according to Business Insider. The man tapped to run Vice’s daily HBO news show, Josh Tyrangiel, will now oversee all news operations, including a cable channel and global websites. Far from contracting, Vice has been expanding, hiring high-profile journalists from NBC and the New York Times, and with plans to add bureaus in San Francisco and Hong Kong.
This isn’t a sign of the death knell of digital news, despite other setbacks at BuzzFeed and Mashable. Mashable made cuts as it pivoted toward more video and less global news. And rumors are swirling that BuzzFeed could be cutting back on its own news operation as it focuses more on video and entertainment. If BuzzFeed’s job listings mean anything, there are still openings for 12 editorial jobs, as well as 24 video jobs. And of course Vice still lists dozens of job openings, including for editorial. The truth is that as digital news companies pivot and try to figure out long-term business models, new people will come and others will get lost in the shuffle. And those big hockey-stick charts of user and personnel growth can’t go up forever.
New EU Rules Could Force Streaming Services to Fund Local Content
The European Union has long been a thorn in the side of tech companies, from Microsoft to Google. Now the EU is proposing a new set of rules that could require streaming services like Netflix and Amazon to have at least 20 percent of its content sourced from local countries. And if the services didn’t comply, they would have to pay fines that would help fund more local programming. While Netflix and Apple already satisfy the 20% threshold of European programming, with a lot of British shows, there’s still the issue of each country setting their own standard for local content. In France, for instance, the threshold is 60% for streaming video services, and that’s why Netflix set up its European operations in the Netherlands.
Not surprisingly, Netflix is opposed to any new quotas, and it has already invested in an original British series, The Crown, as well as local language shows in Germany, Spain and Italy. But it has only spent 1% of revenues on European productions, compared to European broadcasters that have to spend 20% of revenues on local productions. So far, these are just proposals and have a way to go before becoming law, and individual countries can still decide whether to enforce those. While the European market is enticing for any tech or media company to conquer, the EU’s rules for local content could make them think twice before pushing so hard for expansion as Netflix has done. Preserving local content is a good and worthy goal for the EU, as is staving off complete Hollywood domination, but working more closely with the industry will likely yield better results.
Rant & Rave by Mark Glaser
Being an independent online publication isn’t easy. Traditionally, there have been two ways to support yourself, either through advertising or by selling subscriptions or putting in a pay wall. But both of those business models have problems.
Online advertising is a race to the bottom, with blinking, flashing ads inundating readers. You almost have to brace yourself before reading a story on a typical newspaper website. Your smartphone swiping thumb has to avoid auto-play videos or sliding ads as you try to find the real text to the story. On a desktop, reading such a story involves pop-up videos, newsletter sign-up boxes and ads inserted into the text of the story.
And when it comes to pay walls, people can share passwords or figure out strategies of finding the stories on social media or elsewhere for free without having to pay. Some larger financial or niche sites like Financial Times and Wall Street Journal can succeed with paid content, but that doesn’t work with most other sites. There’s a prevailing feeling online that “information wants to be free,” and that makes it hard to charge for anything.
So how do you make such a business work? At MediaShift, we have had to diversify our revenues and offerings. We’ve produced events, from mixers to workshops to weekend Hackathons. We’ve launched online trainings in partnerships with universities. And now we are developing a new Studio offering, where we supply editorial services to companies, publishers, and startups. But what about the core business of selling ads? We still do that, and we could obviously do more. But where do you draw the line between increased revenues and annoying the hell out of your community?
We have prided ourselves in trying not to cross that line, and making sure our advertising is targeted to what our audience wants. But there are always enticements, pitches and vendors offering easy ways to make more money. First, there are the ad networks, offering up minuscule revenues to serve up ads in your “remnant inventory.” This is ad space you never can sell, so they will buy it up. Is it found money from under your sofa cushions? Free money! Not really. These ads tend to be for questionable products, including weight loss drugs or cheap mortgages or credit cards.
I was recently pitched on video ads that look great and are slotted to show up right inside the text of stories. You’ve probably seen them before. They are muted, but the sound plays if someone’s mouse goes over the ad. You can imagine how people react to them, almost like a videogame, trying to avoid getting their mouse on them. And on mobile, your thumb has to perform a contorted dance to somehow scroll past those videos. The offer was a pretty low CPM, which might make MediaShift a few hundred dollars a month. But at what cost? How many people in our community would be turned off by those ads, upset by them? The sad answer is that people get used to them, and start to figure out how to avoid them. But that shouldn’t be the right way to run an online publication, or to serve an online community.
There has also been an amazing surge in people offering up paid blog posts or free content, as long as it links back to a specific website, typically a link farm. Here’s a recent pitch I received:
“I was wondering if you would like a 100% unique, very high-quality article written specifically for MediaShift at no cost? If so I would only ask for a single link back to my site… I am a writer in my spare time looking to build my portfolio while generating a few links to our company site at the same time.”
Who doesn’t want some free high-quality content for their site? The main problem is that the content they offer up is not high-quality and not at all relevant for our audience. In the guise of native ads, these sometimes paid posts will bring in little money, offer poor content, and little in the way of educating or enlightening our audience.
It’s not hard for me to ignore these pitches, but the sad part is that people do take them up on their offers. Selling your soul as an online publisher is as easy as opening up your email. Join a handful of ad networks, cover your site in blinky, annoying ads, and sell your blog posts to anyone who asks. The temptation is always present, knocking on your door, just like payday loans for the poor. But resisting these temptations is of paramount importance if you want to maintain trust, maintain control and keep your community intact. Otherwise, you might as well pack up the tent and go home.
Music on this Episode
Jefferson Yen is the producer for the Mediatwits Podcast. His work has been on KPCC Southern California Public Radio and KRTS Marfa Public Radio. You can follow him @jeffersontyen.