Through Steve Boriss’ blog, The Future of News, I read Terry Heaton’s post on the real business of media companies - advertising. After discussing the missed opportunities of railroads due to their failure to recognize their true business, he suggests the same is true of media executives who think of themselves as being in the newspaper, radio, TV, or even the information business. The reality, though, is different:

Media makes its money through advertising, and this is the only disruption that matters for traditional media companies, for new forms of media aren’t taking readers, listeners or viewers away, they’re taking advertising away, and this should be the principal focus at the top of all media companies, especially local media companies. Amazingly, it is not.

With consumers expecting information to be free, the focus on advertisers must grow. Without an audience, there can be no advertising, of course, so serving the audience remains of critical importance, but media companies must now begin to think more than ever about how to attract advertisers. As Heaton points out, the online competition here are the Internet pure plays like Google and Yelp, not the usual local competitors. He then goes on to suggest two courses of action, both of which I’ve also advocated.

The first is to create a “a horizontal local ad network, one that serves all websites within the market…” The pureplays are already doing this and, once again, local media companies find themselves playing catch-up.

The second is to “combine resources to create a single local information portal and to compete within that instead of standing alone on the Web…” This idea goes somewhat beyond what I’ve supported since it involves local media joining forces to create this portal. I think it would be a great improvement, although perhaps only a first step, for the local newspaper to think of itself as a portal, linking to the best content on other local sites. With an advertising network in place, however, this is much closer to Heaton’s idea.

Thinking about the future of media companies, Steve Boriss believes that, “Journalists’ independence from advertisers will be seen as a luxury from an age when traditional outlets had more power over advertisers than they ever will again.”

Sheila McClear just published a post on Gawker suggesting that newspapers should eliminate comments on story pages.

Comments are thought to be an added value to a newspaper’s site—providing another reason to read. You come for the article, and stay for the interesting discussion. The only problem is, there is no interesting discussion. Almost never. Not even from the mythical supersmart New York Times readers.

McClear trots out some “Sample comments, notably[sic] only in how uneducated and un-thoughtful they were?[sic]” The sample comment below was made on David Carr’s book excerpt in the NYT Magazine.

if he wasn’t a reporter for the new york times, would we be reading this?

This is uneducated and unthoughtful? This seems to me to be a pretty succinct summation of what a lot of people think about Carr’s story. But McClear’s opinion of the comment sheds some light on what is going on here - she thinks it’s “uneducated and unthoughtful,” so it must be.

(By the way, another sample comment McClear uses later in her post is one on a New York Daily News story that says simply, “W-h-o-r-e.” The irony of a former peep show girl finding fault with that comment is too delicious to pass up! Nothing against peep show girls, some of my best friends…)

What McClear is arguing here, seems to be that what the news industry needs is to further isolate journalists from those nasty readers. Perhaps we could greet our Web site users with a “Letter to Readers” splash page the next time they come to our Web site:

Dear Reader,

We have been carefully reviewing your article comments over the past several years and, regrettably, we have found them not to be up to our standards. You have frequently expressed yourself poorly, awkwardly, and just downright incomprehensibly. Many times you have said things that, well, we think just should not have been said. As a result, we will discontinue comments on our articles. Now, we know that many of you enjoy posting comments, write us when comments have been temporarily disabled, and read comments on controversial stories, thereby driving up page views, but we believe that, relieved of the distraction of uneducated and unthoughtful opinions, you will find our Web site a much more civil place.

Whatever happened to, if you don’t like them, don’t read them? Not only that, it’s not unusual to find comments posted by experts or eye witnesses who can add something to the story that may have been missed by the reporter. Look, I think a lot of comments are stupid too, but who am I to judge? I’ll bet a lot of people will think this post is stupid.

A few months ago I wrote about a Kevin Kelly post on editors vs. the hive mind, in which he talked about the “elite center” of Wikipedia. His point was that even the internet’s most cited example of the hive mind has some design to it, and that content winners will ultimately be some combination of hive mind and intelligent design.

Now there is news that Wikipedia is moving a bit closer to intelligent design with the implementation of a checker system to verify that changes are not vandalism. The system has been in use on the German site and that site’s administrator will talk about how it’s going Friday at Wikimania 2008 in Alexandria, Egypt. As you might expect given the size of the Wikipedia sites, this effort involves so many checkers (about 3,000), that the checker system itself seems like the hive mind. While no doubt a hot topic at the conference, I see this as simply the ongoing evolution of Wikipedia as it sorts out that right balance between hive mind and intelligent design.

Earlier this summer, Anita Elberse published a review of the Long Tail theory in the Harvard Business Review. Elberse concludes that:

Although no one disputes the lengthening of the tail (clearly, more obscure products are being made available for purchase every day), the tail is likely to be extremely flat and populated by titles that are mostly a diversion for consumers whose appetite for true blockbusters continues to grow. It is therefore highly disputable that much money can be made in the tail. In sales of both videos and recorded music—in many ways the perfect products to test the long-tail theory—we see that hits are and probably will remain dominant.

While a response from Chris Anderson debates the meaning of “head” and “tail,” Elberse reiterates her conclusion that while the tail has certainly grown, it remains very flat and that sales have become even more (relatively) concentrated in the head. She goes on to give some advice to producers and retailers, some of which is particularly interesting to media companies.

“Don’t radically alter blockbuster resource-allocation or product-portfolio management strategies. A few winners will still go a long way—probably even further than before.” While the cost to distribute content online is very low, the cost to produce that content usually is not. This, of course, is why we see media companies hoping that user generated content will fill out their long tail. This also argues for obtaining the technological capability to aggregate obscure content on the fly.

If one considers media companies to be information retailers, Elberse’s more interesting advice is that which she gives to retailers, building off of her finding that heavier customers are more active in the tail, while lighter customers stay mostly in the head.

“If the goal is to cater to your heavy customers, broaden your assortment with more niche products.” An obvious piece of advice based on the research, but the corollary shows up as, “Acquire and manage customers by using your most popular products.” Now think of the local news site. For the light news consumer, the most popular content tends to be major news stories. We see this expressed in focus group comments like, “I want to know enough to be able to discuss major events with friends.” These major stories, however, are typically national and international news, not local. The implication is to use these stories to draw in your audience while then marketing the full breadth of content throughout the site. The real question is can major local stories be used to draw in the light reader? Are there enough local stories the light reader would consider major?

Finally, Sean X. Cummings at iMedia makes an interesting point about Elberse’s work when he notes that she doesn’t consider the “phenomenon of choice:”

What gets people in the door is often not what they eventually buy. Product differentiation is often key in consumer choice. Sexy products sell the less attractive and less expensive ones.

Noting that a large slice of Campbell’s Soup sales come from Cream of Mushroom and Tomato, he says that it’s the huge swath of red and white cans in the grocery aisle that draws the consumer in.

It comes back to marketing that breadth of content.