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A dance with data

Yesterday, Google reminded me that I had a half hour left on my shift.

Along with this it showed me a map highlighting my current location, my destination and my route of choice for getting there – complete with up-to-date traffic information so I could see how long the journey might take.

The thing was, I had never told Google any of this information – nor did I ask for a reminder of my clocking-off time. Continue reading →

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Apple’s US manufacturing bet

Apple’s CEO Tim Cook has revealed that one product line in the company’s Mac range will be manufactured in the US next year, a blip in the decades-long trend that has seen such activity move to Asia (and in particular, China).

On the surface it may seem like another fine piece of PR from the Californian company (and that’s because it is), but the reasoning behind the decision is far more nuanced than that.

While likely to remain relatively low-cost for some time, manufacturing in China is beginning to get more expensive. The middle class is growing and workers are beginning to unionise, which will ultimately lead to demand for higher wages there.

Coupled with this is a rise in distribution costs, which means that getting the finished products out of China and to consumers – more often than not in the US – is gobbling up more of Apple’s (very handsome) profit margin.

Apple’s decision to begin manufacturing a small amount of its products in the US is most definitely a toe-in-the-water tactic, but it is also a defensive manoeuvre that will give the company a head-start if (or indeed when) Chinese manufacturing loses its edge.

Doing it before anyone else does is the icing on the PR department’s cake.

Of course those optics of it are not to be sniffed at either – Apple will now be championed for creating jobs in the US and can soon vaguely state that it has “begun” manufacturing in the country. This is despite the fact that it will be one line in a product category that accounted for just 14% of the company’s revenue in Q3 2012.

Perhaps a more important political consequence, for a cold-eyed businessman like Tim Cook at least, will be the opportunity to sell products to the US Government (which requires that they are manufactured in the US-of-A).

Finally, having a manufacturing base in the US plays into the Apple desire for control.

Having a factory down the road means higher up-front costs but it also means product quality can be more easily monitored, which could reduce faults and – by proxy – returns costs.

It also allows the company to keep a closer eye on factory conditions, thus reducing the chance of Foxxcon-like scandals which are damaging to its coveted brand.

China will remain a manufacturing powerhouse for the foreseeable future, of course. However Apple’s decision is sure to make some people sit up and take notice.

Coincidently, when I interviewed PCH International’s Liam Casey (known as ‘Mr China’ for his work in helping companies get products mass produced in the country) at the 2012 Dublin Web Summit, the topic of rising costs in China came up.

He sees the demographics changing but said the country will ultimately remain the place to manufacture because the expertise, speed and scale to do so is there.

Despite today’s revelation it can be assumed that even Tim Cook agrees with this, at least as long as the iPhone, iPad – and the majority of Macs – are getting churned out from Chinese production lines.

Obama’s data machine and the future of political campaigns

A lot has been said about how data was used to predict the result of the 2012 US election.

A lot has also been made of the Obama campaign’s ability to use raw data (and online platforms) to its advantage.

This article, however, is the first time I’ve seen some real detail on exactly what that data machine looked like and what it achieved.

It’s a long piece – and it spends a lot of time looking at the personalities behind the programming – but for some really eye-opening stats skip down to the ‘what they actually built’ section on page 2.

Some choice facts and figures from there -

  • 30,000 Reddit users registered to vote through Obama’s site after he did an AMA there
  • The campaign used data from DVR boxes (akin to a Sky+ box) to target ads at viewers who had watched certain things, for example the TV debates
  • They designed a Twitter tool that could calculate a user’s influence, cross-reference it with other data (like if they were in a battleground state) and target DMs accordingly
  • Facebook fans were told if friends certain hadn’t voted and encouraged to get them to do so
  • The campaign created a ‘quick donate’ function similar to make repeat donations as easy as buying from Amazon or iTunes

Journalism by numbers

The Irish Institute of European Affairs recently held an event on the future of journalism, featuring speeches by RTÉ‘s Director General Noel Curren, The Irish Times‘ Editor Kevin O’Sullivan, The Journal‘s Co-Founder Brian Fallon and Silicon Republic‘s Editor-At-Large Ann O’Dea.

For the most part the speeches were interesting, though unsurprisingly they did not give the audience anything that it did not already know.

One aspect that did stand out for me, however, was Brian Fallon’s number-crunching on potential revenue models for Irish media outlets. I’ve already had a discussion with him on Twitter about the figures but I thought it might help to blog about too, as 140 characters just is not enough space when you are trying to question and make nuanced points.

Fallon’s figures

You can see the details of Fallon’s figures for yourself by skipping ahead to the 8m 25s mark on the video of his speech. Failing that, you can also read through his presentation, which has helpfully been made available online (the revenue figures can be found from page 19 on).

To summarise, however, Fallon suggests:

  • Based on the average online readership of traditional media outlets like The Irish Times, RTÉ and The Irish Independent (all ~700,000 unique readers per month reading 35m pages – excluding mobile readership and, according to Fallon, international readers too) you could reasonably expect to generate revenue of €3.8m per year.
  • Using the subscription price charged – and a similar conversion rate predicted – by The New York Times under its “freemium” model (5% of online readers paying ~€155 per year) these same sites could stand to generate €3.3m in revenue per year.

Fallon says this kind of revenue would be enough for an outlet like The Journal to employ 80 journalists.

To me, however, his numbers do not add up.

The freemium cliff

The “freemium” model used by The New York Times is relatively simple – allow users a limited amount of free access (initially the NYT allowed 20 monthly page views for free, now it’s just 10), after which they the a paywall and must subscribe or go elsewhere.

The theory is this allows a site to continue to draw in casual readers and make money from their page impressions, while also forcing people to pay up if they are heavy users of the site.

There’s no reason why it could not be deployed in an Irish context (bar RTÉ, in my opinion, which would be breaching its public service remit by going behind a paywall of any kind) but the problem is the readership figures currently enjoyed would become irrelevant.

Once you erect a paywall – freemium or otherwise – you will lose readers. The NYT lost 5-15% of its daily readership in the immediate aftermath of its move to freemium – meanwhile its page views declined by 30%.

It makes sense – if people cannot access more than 20 pages without paying then page views will drop. Many users will also decide to go elsewhere for their news altogether – you just have to hope there are more who decide to cough up for a subscription.

In an Irish context, a 30% drop in page views would mean 10.5m fewer pages read a month – a corresponding drop in revenue (based on Fallon’s figures) would bring that €3.8m of ad money down to €2.6m.

The chicken and the egg

The other problem I see in Fallon’s hypothesis is the application of big media outlets’ numbers to a smaller, low-cost outlet.

In saying that The Journal would be able to grow its team of journalists massively if it had revenue from readership figures akin to The Irish Times, The Irish Independent or RTÉ – coupled with subscription numbers relative to those aspired to by The New York Times – to me misses an important point.

Getting those kind of readership figures – and most importantly the kind of readership that will pay for access – costs.

The aforementioned big media outlets have the readership figures that they do for a number of reasons, not least because they have a large, broad staff that create the content that attracts so many readers.

In other words, to me, it’s not a question of “get X readers so you can employ Y journalists”, it’s the other way around.

When it comes to subscriptions I think having a breadth of unique, quality content is even more critical.

The NYT has a well-earned reputation for quality – in the last three years alone work published in the newspaper has received seven Pulitzer Prizes, for example.

It has enough breadth and depth that it can demand a fee from its readers and clearly there are plenty of readers who feel they are getting value for money from that arrangement.

With all due respect to The Journal I don’t think all that many of its readers would be as willing to pay up if it deployed a freemium model tomorrow. (I’d wager that staff and management within The Journal itself would agree with that – otherwise it would probably have done it already).

That’s not to say that having the kind of feature writers, correspondents, analysts, columnists, investigative journalists and multimedia journalists required to change that dynamic is not on The Journal’s roadmap; I can only assume it is.

However as any media outlet moves to build this kind of fully-fledged newsroom – even those with no legacy costs to worry about – it will quickly encounter financial demands beyond the journalist’s pay.

For example, a correspondent might incur expenses as part of their daily routine, which need to be covered. A multimedia journalist needs to be backed-up with good equipment (camera, mic, a computer, editing software etc) and perhaps even another body to film or edit. An investigative journalist needs time and resources to create a single story that might not come close to paying for itself in the short-term.

For that reason alone I don’t think it’s entirely fair to apply the audience stats of a big media organisation to the cost structure of a small operator – it puts too much emphasis on legacy costs and to some degree overlooks the investment required to build a loyal audience.

A note of optimism

That said I do think Irish journalism can be profitable in the online sphere and I also share Fallon’s optimism about the future of journalism, albeit, perhaps, for somewhat different reasons.

It’s clear that a realisation has hit the Irish media, something that The Journal can probably take some credit for. Traditional outlets are beginning to take the internet seriously, because they finally realise its importance to their surivival.

The Irish Times, for example, is starting to do some really interesting things online and seems to be moving away from the “print on your computer” mentality that has hampered the digital strategies of newspapers the world over.

The Journal too has shown what can be achieved in a short space of time with a low cost-base. I’m interested to see how it develops over the next 18 months, as I feel it is at an important juncture which will define the outlet for the foreseeable future if not forever.

I also think that the freemium model has merit and could be successfully applied to an Irish outlet; I’m not convinced that there is any that have hit the right note to pull it off just yet, though.

Cleaning up my act

A fair while ago this site got hacked and, long story short, there was a nice bit of malware injected into the site’s code as a result.

I’ve been trying on and off – with my limited coding abilities – to clean this up since the turn of the new year and I think I’ve finally gotten it all sorted. Most importantly Google seems to think so too.

This attack will at least partially explain why things have been so quiet around here lately. For a start the dodgy code seemed to break wordpress, meaning it was hard if not impossible to post anything even if I wanted. However I was also reluctant to do anything that might encourage readers to come to the site and, as a result, get some kind of virus on their computer.

That’s not the only reason, of course. Thankfully I’ve also been quite busy with “real” work, most significantly in the past month, and so things like this tend to get overlooked in favour of the instant satisfaction that Twitter brings.

I do hope to get back into the habit of posting here, though, even if it is just once or twice a week.

To start with I’ll put up some of the more interesting things that have kept me busy in the last few weeks. Expect that in the next day or so.

Michael O’Doherty in bad journalism shocker

The Evening Herald’s Michael O’Doherty recently bemoaned the “Apple society” of which he had become a member, following his purchase of an iPhone.

This world was full of unlikable hipsters, he said, who do little more than brag about their latest Apple purchases.

As evidence of his claim he pointed to news that Apple was rolling out a ‘Friend Bar’ in its shops; a place where people can go to talk about Apple products as opposed to actually get help, support or repairs.

The ‘Friend Bar’ story, however, came from the Onion News Network, the internet’s finest fake news site:

Friend Bar story from ONN

BlogTalk conference to be held in Galway (IT – 13/08/10)

Leading figures in social media will descend on Galway later this month as part of the seventh annual BlogTalk international conference. The two-day event, which took place last year in South Korea, will be held on the campus of NUI Galway on August 26th and 27th.

Speakers already scheduled include Galway-born entrepreneur Fergus Hurley and Dan Gillmor, the former Silicon Valley journalist who is now director of the Knight Centre for Digital Media Entrepreneurship. Representatives of the industry’s biggest players, including Google and Facebook, are also due to address attendees.

The conference’s general chairman John Breslin accepted that in recent years many other social media conferences had been created and this had pushed them to open the event to anyone interested in attending.

However, despite these other events he felt BlogTalk still had a unique selling point, particularly due to the more forward-looking approach it takes to the industry.

“We have a nice bunch of speakers coming in this year; it has traditionally been more of a technical event but now there’s a split between technical and general interest,” he said. “It also has a mixture of what’s going on now but also has some future talks.

“We have a lot of people coming in talking about what they’re doing next which is always very interesting.”

Despite the conference’s name, this year’s BlogTalk will have little to do with the relatively old-fashioned platform of blogging, instead focusing on the impact of newer social tools such as Twitter. Mr Breslin said this was a sign of how quickly the internet was evolving and creating new communications channels.

“The conference was all about blogging when it started seven years ago but blogs have kind of faded from the limelight and it’s more about social media now,” he said. “This is probably the last year we will use the BlogTalk name, to be honest.”

Two-day tickets for the event are €149 or €99 for students and the unemployed; a one-day ticket costs €99. A full list of speakers and times can be found at 2010.blogtalk.net.