Dale Peskin forecast the emergence of social media as a newspaper editor in the early 1990s. In association with the Rand Corporation, he laid out scenarios of implication -- all of which occurred -- for news, newspapers and the culture as Executive Director of the news industry think tank New Directions for News. He coined the phrase "We Media" in 2002, then commissioned the report that described how audiences would set the agenda for news and information. He currently serves as founder and Chief Vision Officer of the We Media Group, which develops breakthrough solutions that apply social and digital medias strategies for businesses globally and locally. Contact Dale at 703-474-5563. A facilitator at API's Newsmedia Economic Action Plan Conference last year, Dale was asked about the role of social media in new media business models. Here's what he said.
1. What exactly is We Media?
Think of it as people-powered media, a global communications network of informed citizens that support the need for human interaction and representation. We Media is a channel for the democratization of knowledge and information. It has been applied in different ways throughout history, notably at the founding of the American experience and the emergence of America's citizen press (thanks in part to founding blogger Silence Dogood, also known as Ben Franklin). The current version is enabled by accessible, affordable and scalable digital publishing systems.
Three fundamental components comprise We Media: Content, Audience and Trust:
Content can be created by anyone and can be haracterized by qualities that allow it to be shared and linked to other content, then continuously enhanced, referenced, sourced, verified or debunked during the social life (conversation) of a story or myth.
Audience is at both the center and edges. We Media organizes audience from the outside in, not the other way. It's the beginning, not the endproduct, of a communications network. Audience is the fuel of We Media, the means and method for the exchange of stories, ideas, information and knowledge.
Trust is the glue. Based on Maslow's Hierarchy of Needs, trust is acquired through personal participation, experience, reputation, authority and credibility often associated with an informed friend or expert, or by idea, values or philosophy shared by many.
2. Why is We Media so threatening to traditional media? As a career journalist and news executive, I envisioned breakthrough opportunities for journalism and news-based business at the dawn of the Internet age in the mid-90s. But most journalists and publishers either denied a transformational shift in the communications needs of society or viewed them as a threat to their business and reacted defensively. The implications of those decisions have been tragic.
It's time to come to terms with change and get on with the work we were meant to do: serving the informational and commercial needs of our communities as they reorganize. That's a noble and profitable mission. Rather than cling to the past or -- worse yet, sitting it out -- a new mindset is required to thwart the threats, overcome the fears, and clean up the mess. Here are some key challenges to get heads in the right place.
- Clear up the confusion between content and media. We have been accustomed to describing content by its means of distribution (a newspaper article, a television broadcast, a radio show, etc.). We tried the word "convergence," but it didn't take because it got things slightly wrong. Now the term "media" applies in a generic way: it is, after all, a channel word not a content word. The process that has been labeled social media is essentially the separation of content from its means of distribution. Hence the problem. We don't have it in our vocabulary to describe content except by its means of distribution. That is why we coined the term We Media to help understand what content means in a connected society.
- Get control by losing it. It is hard to get past the notion that equates technology and media less as ways of empowering people than as a way of controlling them. The Digital Age has brought access to a world of information and sources to almost anyone. It puts news at the finger tips and in the palm of the hand at a low cost. Newspaper publishers acquired audience and prominence through expensive infrastructures and controlled distribution systems developed during the Industrial Age. Mass production, mass media and mass marketing flourished as premiums of scarcity. They are based on the premise that human beings fall into place as cogs in highly efficient systems then behave with great predictability. That premise is now obsolete. We must get comfortable with abundance, access and unpredictability.
- End the values war. American journalists created a mythology for their work that set them apart as expert intermediaries of news and information. In the We Media era, the world has discovered discrepancies in that mythology while also opening sources and expertise to anyone. As a matter of identity and survival, many "professional" journalists cling to the closed values system that supports them. And now as a matter of self-interest, newspaper publishers decry the capabilities of an informed and creative marketplace they once served.
We are left with one of the ironies of the American experience: Traditional news organizations believe the Bill of Rights extends a privilege to conduct businesses and systems that enlighten the public. We Media citizens believe the privilege exists for all. The debate over who is on the right side of democracy now turns to who is on the right side of capitalism. The good news about democracy and capitalism is that they both work best when everyone participates.
- Differentiate technology from sociology. The Internet changed everything, but not in the way most people think. Truth is, most people -- especially those in business -- don't get the Internet. They tend to think of computers, devices, and networks as as the extensions of industrialization and automation of the workplace and market. They think the answer is a new thing like the Kindle or digital ink. Actually, technologies are not so important for any particular thing they can do, but for how they change our perspective on everything else. The Internet is not a technological or even media phenomenom: it is a social phenomenon.
- Embrace interactivity. The interactivity of the Web has changed everything. Who doesn't want news and information that's immediate and mobile with the capability to share, comment, act, transact and locate?
- Look for the money in new places. Money makes the world go around, the song goes. Advertising and commerce now work like iTunes: pay a little, over and over. The microeconomics of abundance have replaced the macroeconomics of mass media and marketing. Stop singing to the same choir and find harmony in the voices of people who are singing their own tune.
- Think different. Apple's old slogan may not be grammatical, but it sure pays off. The structure of today's news enterprise is a remnant of the bygoing era of manufacturing. Capitalization, organization, management structure, governance, infrastructure, process, standards, training, investment, business development, sales, performance, culture and, yes, thinking -- are all built around the assembly-line model of the Industrial Revolution. Computers and the Internet may have replaced pneumatic tubes and paper spikes in the newsroom, but the way information flows and how business is conducted follows familiar patterns. News and data pour through walls in the Information Age. Managing them as either a journalist or business leader requires an enlightened perspective on how people are informed and how they conduct commerce in a connected society.
3. Where's the money?
The simple answer is everywhere, but not in the places where you formerly looked for it. We Media depends on interactions between people to build shared-meaning, using technology as a conduit. It has been touted as a fresh direction for marketing by allowing companies to talk directly with consumers, as opposed to talking at them. The benefits range from direct transactions, such those on craigslist, to direct consumer engagement with enormous reach.
During the first Internet boom, the most common business model was to figure out how to drive traffic, then figure out how to make money -- which only worked for a few, big players. Often, the way to make money through Web traffic was to sell display or text advertising. Making money from advertising is still possible, but it's no longer as easy as building a site and seeking ads for it.
Socialnomics enable dozens of new models for revenue-generation. Some are just now emerging (we'll talk about them at the conference). Others are cousins of traditional models. The difference: they all start with audience.
Traditionalists dismiss socialnomics as voodoo, suggesting that the economics of media have not changed. There is abundant evidence to the contrary. Look at craigslist for just one business case:
With a crude interface and cheap technology, tech-nerd Craig Newmark set out to create a list of social activities for his friends based on sharing and peer-to-peer transactions of simple content. Ten years later: 47 million page views per month in the US alone -- that's one fifth of the nation's adult population -- and $100 million in revenue from less than 10 percent of the content on the site for which craigslist charges (job ads in some cities, and apartment listings in New York). craigslist is now valued in the billions.
And the site is a mess; news organizations could and should do better. Asked how he did it, Newmark cites three secret ingredients: content, audience and trust. Sound familiar?
We Media is amassing huge audiences that exceed other channels. Business follows an audience, so it only makes sense to follow what's happening with social media. The beauty of social media is that it can be rapidly planned and implemented at a relatively low cost. The return on investment can be huge.
The news industry now approaches We Media with an economic test: One response is that the present value (economic) of social media is low and will, in the short term, result in more expense than revenue. In this scenario, social media activities would add additional tasks, strain resources and divert mindshare from existing projects and strategy. Another answer is that the future value (social, journalistic and economic) of social media will eclipse that of current models. In this scenario, social media activities would provide a strategy to replace declining revenues from current business models. Most experts and analysts suggest the business bloom of social media is about two years away. You can't afford to wait. Get started now.
4. Will cutbacks and pay walls save newspapers? The strategy reminds me of a cartoon that was passed around during my college days. It portrayed an eagle swooping down on a mouse whose final response was to flip off his predator. The caption read: "The Last Great Act of Defiance."
My sense is that significant cutbacks in content and staffing, coupled with the loss of audience and influence, expose the news industry as a defiant mouse approaching inevitability. I don't begrudge publishers for trying to add a few bucks to the coffers, but neither the market's appetite nor current financials validate pay walls as a viable option for a future of sustaining curated journalism and traditional, news-based businesses. Burl Osborne, a publisher and media exec who mentored me on matters of journalism and business, once told me that newspapers can't cut vital organs if they expect to live.
Moreover, the prophets of pay walls seem to have forgotten basic economics. When something becomes abundant, it also becomes cheap. Listen to Paul Krugman, the Nobel laureate who covers economics for The New York Times:
"A world awash in information is a world in which a lot of information has very little market value. And when the economy becomes extremely good at doing something, that activity becomes less rather than more important." Content is expanding. Audiences are shifting. Trust is sliding away. Who's going to pay for remnants? How much are they really worth? The news industry needs better options than we're-now-going-to charge-for-the stuff-youwouldn't-read-for-free.
5. Now what?
The growing ease with which information can be transmitted and reproduced is making it harder for creators to profit from their creations. How, then, can creativity be made to pay? The answer has been apparent for decades: you make money indirectly by selling or promoting something else.
Survival and success reside in the acceptance of We Media as the principal mway society is informed, and to an extent, on "free" content from a wealth of reliable sources. For newspapers, and by that I mean print and online, the challenge is to develop content, audience and trust for informed citizens during an era of social interaction through media. That requires entrepreneurship and imagination, no less than a rethinking of the role of newspapers in society and a restructuring of the businesses that sustain the newspaper enterprise.
The problem now is not finding information; it's filtering it and structuring it. TMI -- too much information -- has become a recognized acronym. You can't rely on human editors to structure information anymore; you need automated tools, augmented by human expertise and specific knowledge. Search alone doesn't work.
The business problem that needs to be addressed is this: how to help overwhelmed consumers manage information at the personal level. News enterprises should be well-positioned to help consumers make sense of their mlives. Imagine business scenarios where a newspaper could help them value their own data in the context of news, community, their friends' data, or messages from marketers and merchants.
But first, newspapers need to live up to the advantage they say they have in their communities: their relationship with local readers, customers and merchants. By now news enterprises should have a wealth of extensive data -- a digital dashboard, if you will -- on readers and registered users: how they behave online and off, their habits, their photos and friendships -- all the data that has now become sufficiently extensive and complex to require management.
Searching the Internet gets you to places where you can find news, book travel, buy music, locate places and trade stocks, but neither search nor destination sites allow users to aggregate, manage and analyze all their own content and data. Nor are they good at relating information from others to personal preferences. News enterprises could and should provide that service as the central component of an audience-based strategy.
As a business proposition, news enterprises could focus on making the online experience more consistent, integrated and rewarding for many communities. They could enable local consumers to assemble a variety of services in one place. As the concierge of the Internet, they could be paid for finding, recommending, organizing, enabling, brokering and facilitating millions of transactions. Such a model could focus and finance their journalism. It could also crush their cost structure: they would no longer need to amortize the Industrial Revolution with costly, outdated investments in mechanical systems, delivery trucks, gasoline and newsprint.
This viable model requires leaders to embrace We Media as journalistic and economic realities powered by people. We need to rethink the newspaper metaphor. Think different. There really is no other choice.
Jerry Kackley is president of K Group in Scottsdale, Arizona, and has more than 20 years of experience as a senior marketing executive. His firm serves the newspaper industry in circulation and advertising pricing, sales compensation and sales management. A featured discussion leader at API's Value Optimized Pricing (Sept. 20-21), Kackley shares eight rules to create positive momentum with high growth advertisers.
"Over the past few years, many newspaper organizations have made progress in improving the effectiveness of their sales forces. But there is still a huge opportunity to do more, according to Ron Siahpoosh, Associate Principal of global sales consulting firm, 
