Wednesday, October 6, 2010

Business Making Money


For the first time, this year’s Knight News Challenge will be requesting entries in three specific categories: mobile, revenue models, and reputation/credibility. The contest judges won’t be seeking a certain quota of finalists in each category: “It’s much more of a signal to the population at large: These are the areas that need your attention,” Knight consultant Jennifer 8. Lee said on Monday, at a San Francisco information session sponsored by Hacks/Hackers.


Up to now, Lee said the Knight Foundation’s attitude towards the contest has been “we don’t know what news innovation is — you tell us.” But over the past four years, trends have emerged among the contest entries that mirror the broader development of the news business. 2010 was the year of mapping and data visualization projects, Lee said. In 2011, Knight sees innovations in credibility determination, mobile technology, and revenue model generation as key areas of development.


Credibility in the news business used to be based on the brand reputation of large media outlets. But in a world in which anyone can report, and in which, in Lee’s words, rumors can explode and die within a day on Twitter, there’s a need for new ways to measure and establish credibility. For example, Lee said, “How do you know that this person is more serious reporting out of Tehran, or Iran, than that person?” In the world of online media, rumors can gain momentum more quickly and easily than in the traditional media ecosystem. What kinds of tools and filters could be used to combat hoaxes and determine the trustworthiness of online information? That third category is “the one that’s the most vague — and purposefully so,” Lee said.


The mobile and revenue models categories are more straightforward. Last year, the Chicago news site Windy Citizen won $250,000 to develop a software interface to creates “real-time ads” which constantly update with the most recent information from a business’ Twitter feed or Facebook page. Lee said this was a good example of a revenue model project.


The Knight News Challenge is also increasingly open to awarding funding to for-profit companies who want to build open-source projects. Last cycle, one of the grantees was Stamen Design, a top data visualization firm whose founder and employees had a proven commitment to making open source tools in their free time. Knight provided them with $400,000 to dedicate staff hours to projects that they would previously have done on weekends. There are many different ways of making Knight funding viable for for-profit companies, Lee said, so long as the companies can carefully document how the foundation funding is being applied to open-source work. “You can create the open-sourcey version of your project. That part becomes open source, and the other one doesnt,” Lee said. In order to open funding to for-profit companies, “Knight has been really, really creative with the IRS,” Lee said. The foundation has been adapting statutes originally designed to encourage affordable housing development and applying them to open source news projects.


Last year, out of 2,300 initial applications, the Knight Foundation ultimately made 12 grants totaling about $3 million. Lee and two successful News Challenge grantees explained what factors make a project a strong contender—and what pitfalls lead to an early rejection.


— Your project should already have a working prototype. When the creators of Davis Wiki (which the Lab has been following for a while) applied for grant funding to expand their project, they weren’t just pitching a concept. They could point judges to a thriving local website which collects community insight and serves as an open forum for residents to deal with everything from scam artists to lost kittens.


As LocalWiki’s Philip Neustrom explained, one in seven people in Davis, Calif., have contributed material to Davis Wiki, and in a week “basically half” of the city’s residents visit the site. This June, Davis Wiki made The New York Times when residents used the site to assemble information about a local scam artist, the “Crying Girl.”


Neustrom and Mike Ivanov co-founded Davis Wiki in 2004. So by the time they were applying for a 2010 KNC grant, they already had a mature, well-developed site to demonstrate the viability of what they were planning to do.


— Your project should be sustainable. Knight doesn’t want the projects they fund to wither away as soon as the grant money runs out. In the case of LocalWiki, what may be the best proof of their sustainability was actually made after they won Knight funding. Their recent Kickstarter campaign, which closed last month, raised $26,324 for outreach and education work, and 98 percent of that came from Davis community members, Neustrom said. Davis residents helped raise money by organizing a dance party, a silent auction, and fundraising nights at a bar — evidence that future LocalWiki sites will be able to build grassroots support.


— Your project should be catalytic. As a project reviewer, Lee said she looks for ideas that will catalyze development in a larger area. That means not just having a proven concept, but having one that’s scalable and that brings innovation to an area that needs attention.


Out of 2,300 applicants last year, only 500 were asked to provide a full proposal, and 50 of those became finalists. In the final round, Lee said, there was a lot of consensus between the judges about what projects were ultimately promising. The judges were allowed to apportion their votes between different projects, and 28 of the 50 got no votes, Lee said. Among the common problems with proposals:


— Don’t ask Knight to fund content. Lee said the KNC receives many proposals for, say, money to start a hyperlocal blog in North Carolina. But while the idea of a hyperlocal blog was innovative five or six years ago, Lee said, “at this point, it’s no longer cutting edge. The point of the Knight News Challenge is to encourage innovation, creativity.”


— Don’t apply with projects that don’t fit Knight’s mission. As with any contest, some projects try to shoehorn themselves into an inappropriate category for the sake of funding. A grant to do a project using SMS to provide health information in Africa, for example, would be “too specific to be interesting to the Knight News Challenge,” Lee said.


— Don’t be vague. For example: applying to create “a news aggregator.”


— Avoid generic citizen journalism projects. Say a group wanted to take Flip cams and give them to inner city kids as an experiment in citizen journalism. “We’re not totally into the citizen journalism thing anymore,” Lee said. “It has been given its chance to do its thing and kind of didn’t do its thing that well.”


— Have the credibility to make the project work. An applicant may have a good idea for an innovative project, but he or she also has to have the experience and credibility to actually pull it off. One tip-off that credibility is lacking? If he or she asks for an amount of grant funding that’s disproportional to the realistic needs of the project.


[Disclosure: Both Knight Foundation and Lee have been financial supporters of the Lab.]



Yet Another Study Shows Musicians Making More Money

from the well,-look-at-that dept

We've made the argument repeatedly that saying unauthorized file sharing is hurting the music business lacks evidence. Instead, what we've seen, over and over again, is that more money is pouring into the music business, more music is being produced and (most importantly) that more musicians who embrace this new world are doing better than they would have otherwise. Now, we've pointed to research in the UK, Sweden and the US that have all shown aggregate growth for the music business, with some of the numbers suggesting more money going directly to musicians, rather than gatekeepers.



The latest study, highlighted by TorrentFreak takes a similar look at the Norwegian music market to show very similar findings and (of course) that musicians are, indeed, benefiting:



Like the UK and Swedish studies, this study, covering Norway, found that the aggregate amount going to the industry is up slightly (4% in real terms), mostly thanks to live shows more than making up for the decline in music sales (it's important to note that these researchers appear to have modeled their research on both the UK and Swedish studies, and made only slight changes, which they explain (and justify) in the report. The key finding is that musicians appear to be making significantly more these days than in the past:


Total artist revenues have gone from NOK 208 million in 1999 to NOK 545 million in 2009, which is an increase of about 162%. Excluding state subsidization, the income from 1999 to 2009 has increased with NOK 229 million, or 147%....



According to this, Norwegian artists have seen an increase in all four of their income sources during the past eleven years. This goes contrary to the common belief that artists have seen a decline in income because of the digitalization of the industry.



The loss of record sales because of consequences of the digitalization of the industry has not affected the Norwegian artists in the same brutal way as it has the record companies. Artists earn in general 20% or less from record sales, and a decrease in record sales would most likely be compensated by an increase in one or more of the other three income sources.




Now, it's worth pointing out -- as I learned when I attended Nordic Music Week last year -- that the Norwegian music industry is heavily subsidized by the government, which is one of the four revenue streams discussed above. However, that only represents about 30% of artist revenue in 2009. The largest single component -- again similar to what we've seen elsewhere -- is live revenue, which continues to grow. Even if you exclude state subsidies, the report found that Norwegian artists doubled their income in the past 11 years:

Adjusted for inflation, total artist revenue has gone from NOK 255 million in 1999 to NOK 545 million in 2009, an increase of about NOK 290 million or 114%. Excluding state subsidizations, the increase has changed from NOK 192 million to NOK 386 million, which is an increase of NOK 194 million or 101% This goes to show that the artists themselves, as a group, have seen tremendous more growth than the industry as a whole.

And, yes, there are more musicians out there to split the pie, but the growth rate in the industry has increased more quickly than the growth in musicians.

Since the total number of artists in 1999 and 2009 are available to the authors, it is possible to calculate an average income from music for artists in Norway. With 3200 artists in 1999 the average income from music would be about NOK 65 000. With 4100 artists in 2009 the average income from music is about NOK 133 000, creating an increase of NOK 68 000 or 105%. Adjusted for inflation the income has increased with from about NOK 80 000 to NOK 133 000, an increase of NOK 53 000, an increase of 66%.

Overall, the results, like those in Sweden and the UK, seem to clearly debunk the repeated claims from recording industry folks (and some musicians) that artists are somehow suffering under this new setup. Now, there may absolutely be cases where artists who fail to adapt are struggling, and there's no doubt that some labels that failed to adapt are struggling -- but there's increasingly little evidence that the overall music industry or artists as a whole are suffering. All of the evidence seems to suggest that it's not file sharing that's a problem at all. More money is going into the music business. The only problems are from those in the industry too stubborn or too clueless to adapt to capture the money that's flowing in.



27 Comments | Leave a Comment..



robert shumake

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robert shumake

For the first time, this year’s Knight News Challenge will be requesting entries in three specific categories: mobile, revenue models, and reputation/credibility. The contest judges won’t be seeking a certain quota of finalists in each category: “It’s much more of a signal to the population at large: These are the areas that need your attention,” Knight consultant Jennifer 8. Lee said on Monday, at a San Francisco information session sponsored by Hacks/Hackers.


Up to now, Lee said the Knight Foundation’s attitude towards the contest has been “we don’t know what news innovation is — you tell us.” But over the past four years, trends have emerged among the contest entries that mirror the broader development of the news business. 2010 was the year of mapping and data visualization projects, Lee said. In 2011, Knight sees innovations in credibility determination, mobile technology, and revenue model generation as key areas of development.


Credibility in the news business used to be based on the brand reputation of large media outlets. But in a world in which anyone can report, and in which, in Lee’s words, rumors can explode and die within a day on Twitter, there’s a need for new ways to measure and establish credibility. For example, Lee said, “How do you know that this person is more serious reporting out of Tehran, or Iran, than that person?” In the world of online media, rumors can gain momentum more quickly and easily than in the traditional media ecosystem. What kinds of tools and filters could be used to combat hoaxes and determine the trustworthiness of online information? That third category is “the one that’s the most vague — and purposefully so,” Lee said.


The mobile and revenue models categories are more straightforward. Last year, the Chicago news site Windy Citizen won $250,000 to develop a software interface to creates “real-time ads” which constantly update with the most recent information from a business’ Twitter feed or Facebook page. Lee said this was a good example of a revenue model project.


The Knight News Challenge is also increasingly open to awarding funding to for-profit companies who want to build open-source projects. Last cycle, one of the grantees was Stamen Design, a top data visualization firm whose founder and employees had a proven commitment to making open source tools in their free time. Knight provided them with $400,000 to dedicate staff hours to projects that they would previously have done on weekends. There are many different ways of making Knight funding viable for for-profit companies, Lee said, so long as the companies can carefully document how the foundation funding is being applied to open-source work. “You can create the open-sourcey version of your project. That part becomes open source, and the other one doesnt,” Lee said. In order to open funding to for-profit companies, “Knight has been really, really creative with the IRS,” Lee said. The foundation has been adapting statutes originally designed to encourage affordable housing development and applying them to open source news projects.


Last year, out of 2,300 initial applications, the Knight Foundation ultimately made 12 grants totaling about $3 million. Lee and two successful News Challenge grantees explained what factors make a project a strong contender—and what pitfalls lead to an early rejection.


— Your project should already have a working prototype. When the creators of Davis Wiki (which the Lab has been following for a while) applied for grant funding to expand their project, they weren’t just pitching a concept. They could point judges to a thriving local website which collects community insight and serves as an open forum for residents to deal with everything from scam artists to lost kittens.


As LocalWiki’s Philip Neustrom explained, one in seven people in Davis, Calif., have contributed material to Davis Wiki, and in a week “basically half” of the city’s residents visit the site. This June, Davis Wiki made The New York Times when residents used the site to assemble information about a local scam artist, the “Crying Girl.”


Neustrom and Mike Ivanov co-founded Davis Wiki in 2004. So by the time they were applying for a 2010 KNC grant, they already had a mature, well-developed site to demonstrate the viability of what they were planning to do.


— Your project should be sustainable. Knight doesn’t want the projects they fund to wither away as soon as the grant money runs out. In the case of LocalWiki, what may be the best proof of their sustainability was actually made after they won Knight funding. Their recent Kickstarter campaign, which closed last month, raised $26,324 for outreach and education work, and 98 percent of that came from Davis community members, Neustrom said. Davis residents helped raise money by organizing a dance party, a silent auction, and fundraising nights at a bar — evidence that future LocalWiki sites will be able to build grassroots support.


— Your project should be catalytic. As a project reviewer, Lee said she looks for ideas that will catalyze development in a larger area. That means not just having a proven concept, but having one that’s scalable and that brings innovation to an area that needs attention.


Out of 2,300 applicants last year, only 500 were asked to provide a full proposal, and 50 of those became finalists. In the final round, Lee said, there was a lot of consensus between the judges about what projects were ultimately promising. The judges were allowed to apportion their votes between different projects, and 28 of the 50 got no votes, Lee said. Among the common problems with proposals:


— Don’t ask Knight to fund content. Lee said the KNC receives many proposals for, say, money to start a hyperlocal blog in North Carolina. But while the idea of a hyperlocal blog was innovative five or six years ago, Lee said, “at this point, it’s no longer cutting edge. The point of the Knight News Challenge is to encourage innovation, creativity.”


— Don’t apply with projects that don’t fit Knight’s mission. As with any contest, some projects try to shoehorn themselves into an inappropriate category for the sake of funding. A grant to do a project using SMS to provide health information in Africa, for example, would be “too specific to be interesting to the Knight News Challenge,” Lee said.


— Don’t be vague. For example: applying to create “a news aggregator.”


— Avoid generic citizen journalism projects. Say a group wanted to take Flip cams and give them to inner city kids as an experiment in citizen journalism. “We’re not totally into the citizen journalism thing anymore,” Lee said. “It has been given its chance to do its thing and kind of didn’t do its thing that well.”


— Have the credibility to make the project work. An applicant may have a good idea for an innovative project, but he or she also has to have the experience and credibility to actually pull it off. One tip-off that credibility is lacking? If he or she asks for an amount of grant funding that’s disproportional to the realistic needs of the project.


[Disclosure: Both Knight Foundation and Lee have been financial supporters of the Lab.]



Yet Another Study Shows Musicians Making More Money

from the well,-look-at-that dept

We've made the argument repeatedly that saying unauthorized file sharing is hurting the music business lacks evidence. Instead, what we've seen, over and over again, is that more money is pouring into the music business, more music is being produced and (most importantly) that more musicians who embrace this new world are doing better than they would have otherwise. Now, we've pointed to research in the UK, Sweden and the US that have all shown aggregate growth for the music business, with some of the numbers suggesting more money going directly to musicians, rather than gatekeepers.



The latest study, highlighted by TorrentFreak takes a similar look at the Norwegian music market to show very similar findings and (of course) that musicians are, indeed, benefiting:



Like the UK and Swedish studies, this study, covering Norway, found that the aggregate amount going to the industry is up slightly (4% in real terms), mostly thanks to live shows more than making up for the decline in music sales (it's important to note that these researchers appear to have modeled their research on both the UK and Swedish studies, and made only slight changes, which they explain (and justify) in the report. The key finding is that musicians appear to be making significantly more these days than in the past:


Total artist revenues have gone from NOK 208 million in 1999 to NOK 545 million in 2009, which is an increase of about 162%. Excluding state subsidization, the income from 1999 to 2009 has increased with NOK 229 million, or 147%....



According to this, Norwegian artists have seen an increase in all four of their income sources during the past eleven years. This goes contrary to the common belief that artists have seen a decline in income because of the digitalization of the industry.



The loss of record sales because of consequences of the digitalization of the industry has not affected the Norwegian artists in the same brutal way as it has the record companies. Artists earn in general 20% or less from record sales, and a decrease in record sales would most likely be compensated by an increase in one or more of the other three income sources.




Now, it's worth pointing out -- as I learned when I attended Nordic Music Week last year -- that the Norwegian music industry is heavily subsidized by the government, which is one of the four revenue streams discussed above. However, that only represents about 30% of artist revenue in 2009. The largest single component -- again similar to what we've seen elsewhere -- is live revenue, which continues to grow. Even if you exclude state subsidies, the report found that Norwegian artists doubled their income in the past 11 years:

Adjusted for inflation, total artist revenue has gone from NOK 255 million in 1999 to NOK 545 million in 2009, an increase of about NOK 290 million or 114%. Excluding state subsidizations, the increase has changed from NOK 192 million to NOK 386 million, which is an increase of NOK 194 million or 101% This goes to show that the artists themselves, as a group, have seen tremendous more growth than the industry as a whole.

And, yes, there are more musicians out there to split the pie, but the growth rate in the industry has increased more quickly than the growth in musicians.

Since the total number of artists in 1999 and 2009 are available to the authors, it is possible to calculate an average income from music for artists in Norway. With 3200 artists in 1999 the average income from music would be about NOK 65 000. With 4100 artists in 2009 the average income from music is about NOK 133 000, creating an increase of NOK 68 000 or 105%. Adjusted for inflation the income has increased with from about NOK 80 000 to NOK 133 000, an increase of NOK 53 000, an increase of 66%.

Overall, the results, like those in Sweden and the UK, seem to clearly debunk the repeated claims from recording industry folks (and some musicians) that artists are somehow suffering under this new setup. Now, there may absolutely be cases where artists who fail to adapt are struggling, and there's no doubt that some labels that failed to adapt are struggling -- but there's increasingly little evidence that the overall music industry or artists as a whole are suffering. All of the evidence seems to suggest that it's not file sharing that's a problem at all. More money is going into the music business. The only problems are from those in the industry too stubborn or too clueless to adapt to capture the money that's flowing in.



27 Comments | Leave a Comment..



robert shumake

Target doing poor job of selling the iPad? | iLounge <b>News</b>

iLounge news discussing the Target doing poor job of selling the iPad?. Find more iPad news from leading independent iPod, iPhone, and iPad site.

Photo of the Week: iPad in Colorado | iLounge <b>News</b>

iLounge news discussing the Photo of the Week: iPad in Colorado. Find more Site News news from leading independent iPod, iPhone, and iPad site.

Gates Foundation Backs ABC <b>News</b> Project - NYTimes.com

The Gates Foundation gives a $1.5 million grant to ABC News to support the network's reporting on various global health crises.






















































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