Hard News by Russell Brown


nz.general: a speech

This is the keynote speech I gave at the Australia New Zealand Internet Awards on the evening of Tuesday, September 17 in Wellington. It compiles a number of thoughts I've expressed in recent times, so keen readers will recognise some parts.

THIS IS A TALK about New Zealand media and the internet. I've spent the past 20 years of my working life at the place where they intersect. I'll be taking a broad view of the word "media", and this is the only slide you'll see. It trust its significance will become clear soon enough.

The Saturday before last was a busy one on the wires for this part of the world. Australia was changing its government, there were rugby tests on both sides of the Tasman -- and a tiny 16 year-old took the stage in front of 5000 people in Auckland and thousands more on the New Zealand internet.

According to Trendsmap at about 11pm, the tiny 16 year-old beat the All Blacks.

The teenager was Lorde, a singer from Auckland whose startling trajectory is a story of our age. Her webcast that was the first full TV concert production to be delivered live to the internet in New Zealand and not to TV. But more of that later.

For now, I want to leave the crowd and take you back to an empty room. Focus on the slide.

Ladies and gentlemen, that slide represents the single node. When was a Usenet newsgroup ever created without discussion? In 1985, when, as its creator, Victoria University's Mark Davies explained later, there was no one to discuss it with. Thus were born online media in New Zealand: with one man alone in a virtual room.

Rooms were added, but for the next decade, New Zealand's internet would largely make its own conversation, on Usenet, BBSes and via the websites created by individuals like Bruce Simpson, Rob Cawte and Mark Profitt. The latter two published the text of my weekly radio rant, Hard News, from 1993. Someone knocked me up a listserv for it, and I put it on Usenet.

The power to publish had arrived.

That same year, I accepted a proposition that I should stop writing about rock music for The Listener and start writing a new column called Computers. The column might as well have been called "Internet", because that's mostly what I wrote about. At one point, the editor asked me in for a chat and said there had been some complaints: so much of this internet thing -- could I not write more about CD-ROMs?

It wasn't until 1996 that Computerworld New Zealand became the first local print publication to offer daily news and features to an internet audience. The paper also hired, as news editor of IDGNet, the country's first dedicated online journalist. That was me.

It was a tremendous time and place to be a reporter. The early ISPs, like the printers in the world I'd come from, all knew each other's business and were more than willing to tell me too. I discovered that I really only needed to keep Nick Wood at Ihug on the line for five minutes and he'd start telling me things he shouldn't.

And then there were the all the things waiting around to be found. Through the 1990s, Mark Davies -- the same guy who started that first newsgroup -- would publish a monthly listing of the .nz namespace. This was a helpful public service.

What was really great if you happened to be a reporter was that Mark also published a list of new domain names for the month. I got used to calling companies about their forthcoming websites before they even knew they had a website forthcoming. It generally came as a surprise to them to find out that it was public information. This was an early example of what was already becoming a new kind of beat for journalists.

By the way, Mark's first walk through .nz was in December 1993, when it held 95 names. His last, in February 1999, listed more than 18,000 names.

One morning in May, I sat down with our network guy and he showed me how to do reverse DNS lookups. We typed in one IP address after another, and soon we had a good picture of a rather large network waiting for a launch. All the servers were named after movie monsters, which looked great in the story we put on the front page of the paper. It didn't read so well for some senior Telecom executives, who were under the impression that they must have been hacked.

But the day came soon enough -- and on the evening of May 14, 1996, Telecom's retail ISP, Xtra, was launched -- and the mainstreaming of the internet in New Zealand truly began. The launch event was interrupted by a fire alarm and everyone had to leave the building. It may or may not have been an omen.

We'd seen individuals become the media, then the media becoming the media -- and now the phone company becoming the media. Turned out, it wasn't so easy. But Xtra's efforts kicked off a particularly fertile time for the IT press. We had recruitment advertising to pay our wages, vendors to fly us and no shortage of stories. Some of the best came from Xtra itself.

When it transpires that the authentication system commissioned by the American wunderkind hired in to run the show issues passwords mapped directly to user IDs? That's a good time to be a technology reporter. When a competitor uses the flaw questionably to taunt the incumbent? Even better. When the reporter becomes the first person in New Zealand to be served with legal action by email after covering the sloppy practice of one of the wunderkind's acquisitions? Stressful. When the wunderkind's past eventually turns out to include an undeclared encounter with several sacks of marijuana? That's gold.

And then there was the spectacular democratic coup at the organisation running a certain ccTLD. That got pretty tasty. And that was the first time I'd seen David Farrar in action. The guy's got some game.

Those days are gone. Computerworld New Zealand, acquired from IDG by Fairfax in 2006, ceased publication this year, and hangs on as a website basically run from Australia. The loss of recruitment advertising had hit it hard, as it did special technology coverage in general.

That's a damn shame. Firstly, because never have we had more need of technically-informed writing. And secondly because I know I'm not the only journalist who benefited from the experience of tech writing. Understanding specialist topics and reporting them in general language is good training.

Also: If anyone would like to write me a script to scrape all my stories from the Computerworld website, just in case, I will surely buy you a drink.

In the five years after 1996, our major media organisations went online. In a sphere defined by rapid change, few first efforts endured. Radio New Zealand's first presence was a private venture which licensed the public broadcaster's signal and delivered it over the internet from 1997 to until 2001, when the RNZ declined to renew the licence and began to get its own act together.

In May 1999, less than two and a half years and one major redesign since launch, the National Business Review closed its sprawling website. Its publisher Barry Colman suggested there might never be another one. The New Zealand Herald's online launch in 1998 replaced a now-forgotten early version. Television New Zealand's NZoom web portal, an ambitious venture created in 2000 as a stand-alone company, was shuttered and folded back into its parent just three years later. All that remains is a domain name that still dutifully resolves back to TVNZ.

The last of the major media companies to adopt a web presence was Independent Newspapers Limited, which in 2001 launched Stuff as an online brand for its 10 daily newspapers, two Sundays and 55 community papers. Under Fairfax ownership, it's now the country's most-read editorial site.

But there are other stories to be told. One is the advent of Newsroom, and its swift successor, Scoop.co.nz. It's hard to believe now that until Scoop found its feet in 1999, the statements of ministers, Opposition MPs, major public agencies and key lobby groups were available to very few people. They would be delivered -- often by hand, at best by fax -- to a group of journalists, who would decide which parts of them were interesting enough for the rest of us to read.

Scoop began publishing these communications verbatim. Not quite unmediated -- because nothing appears on the internet absent context -- but quickly and in full. And -- because every time a printed Word doc is retyped for the web, a kitten is tortured -- it asked political parties to send their releases in electronic form. The major parties initially ignored this impudent request. But Act and the Greens leapt at it and the establishment followed. The nature of political communication changed permanently, and quite quickly.

Now, individual MPs can speak, or be spoken to by the public in real time on Twitter. Gallery journalists routinely scoop their own employers by tweeting from press conferences before they're even over. Occasionally, they -- which is to say, we -- have blazing rows of a kind that once only happened at certain licensed establishments.

In that same year -- 1999 -- New Zealand competitors to two of the big names of internet commerce were launched. FlyingPig was the Amazon-killer. It launched with branding, billboards and the alleged business mojo of Eric Watson. As a journalist, I was pitched the story hard: this was the beginning of an e-commerce empire.

But all the marketing simply drove users to a site that wasn't fit for purpose. Because whatever the people trying work on the code and the systems believed, the key investors had no interest in making the best thing they could. They were more interested in rapid growth and disposal for cash.

While FlyingPig was buying billboard campaigns, Trade Me founder Sam Morgan was putting flyers under people's windscreen wipers. Our would-be Amazon died two years later amid ignomy and an increasingly ridiculous series of financial deals.

By contrast, New Zealand's eBay changed every part of the world it touched.

In particular, although it is not a media company in any traditional sense, Trade Me has had more impact on the local media industry than any company launched in the last quarter century. In small ways, and in one very big way. It began to drain the classified advertising lifeblood that newspapers had assumed was theirs for the past century or more. It was bought by a media company then sold, because it was the last thing that would fetch a price. It's now once again a New Zealand company.

But there's more than that. When you see a headline trumpeting another annual rise in digital advertising revenue, the thing to bear in mind is that almost all of that goes overseas: to spend on offshore sites viewed by New Zealanders, or, more likely, to Google and Facebook. Independent local publishers -- and I'm one -- have seen not only current banner advertising income but any prospective revenue shrivel up and die.

Things have changed at the retail level too. Back when I edited a street mag in the early 90s, restaurants and fashion stores would pay us not only to print lavish ads, but often to produce them. These days, they have a direct, social path to their customers on the internet. And it's much cheaper than advertising in magazines.

My friend Simon Pound, who markets the fashion design business of his partner Ingrid Starnes, tell me that when Facebook changed its promo rules, he stopped Facebook-advertising at their fans and started giving them dresses. It works a lot better, he says. So maybe Facebook has some things to worry about too.

This is having some fairly alarming consequences for print journalism. Maria Slade, the editor of Unlimited magazine, had an important column on Stuff yesterday. It concerned the rise of "content marketing - the genre known as advertorial". Under-employed journalists and cash-starved publishers are going to struggle to hold the line. Some simply won't have much choice but to cross the line.

It's not all gloom. On-demand video from the two big broadcasters is starting to earn advertising revenue -- but not yet enough to even think about doing without conventional broadcast advertising. And the two big newspaper chains get some of the growth too -- but not yet enough to maintain themselves in the post-print world.

That's why it's a cert that both Fairfax and APN will eventually adopt a paywall model. They're presently watching each other like two America's Cup yachts, waiting for the tack. That would be the old sort of boat -- not the catamarans.

Thanks principally to the New York Times, we know that a suitably porous paywall can deliver income without disastrously draining the currency that news needs to work.

So, these are interesting times. But one media sector is much further through this shift than the others.

Many of you in the room will have felt at times like the major record labels in New Zealand -- even the business in general -- are the enemy. And, to be sure, their representatives are still obliged to take positions on copyright that you find not only unworkable but immoral. But they're not the people to yell "change your business model!" at.

In the last five years, their businesses very probably changed more than yours did.

The music industry was doing day-and-date release long before TV, and it has developed a market that should command the attention of the beleaguered local book publishing industry. It sells bits, and the right to bits, but at the edges, it also sells brilliant objects.

Flying Nun Records, a label wound into our national identity, is back in local hands these days, having been rescued from Warner Music, where is was unloved and slowly dying in the basement. Flying Nun sells bits. It has established a very good, curated online store to sell its own bits, and those of other local labels -- making a tiny, welcome dent in the wearisome retail dominance of the iTunes Store.

But through a joint venture with the American label Captured Tracks, Flying Nun also sells beautiful things like this:

[Shows The Clean Vehicle vinyl reissue to crowd, gives it away to the audience member who can answer the question "Where was Vehicle recorded?"]

This is real. Amazon's vinyl turnover is up 100% year-on-year.

And the business is not only in new records. Real Groovy Records' vinyl turnover recently overhauled its revenue from CDs. No one loves CDs. They are mere carriers of bits; the digital watches of their era. The analog record is something different altogether.

There is a lesson for book publishing here: there is a market of bits and a market of objects: be in both.

The market of objects delivers active retail revenue, in relatively large chunks, from relatively few customers. The market of bits mostly delivers passive rights revenue in tiny increments, from people who might not even know they're customers.

95% of music videos on YouTube -- in the broadest sense of the term -- are made by fans and uploaded without the express permission of the rights owners. On the face of it, this looks like a bug. And it used to be. These days it's a feature. These days, the vast majority of music on YouTube, irrespective of who put it there, remains there with the permission of the rights owners, earning tiny increments of money for those owners. Such is the magic of YouTube Content ID.

And it's a game we can play at home. A couple of years ago, Princess Chelsea released a song called 'Cigarette Duet', by Princess Chelsea, on Auckland's Lil' Chief records. It's an unabashed Lee and Nancy pastiche. The accompanying video could hardly have been more simple: two people in a spa pool deadpanning the camera. In the past two years, it has earned nearly 10 million views.

If Psy banked a million in YouTube revenue share from Gangnam Style's one billion views, we could hazard a guess that this one has delivered somewhere between five and ten thousand dollars. It's steady money: someone's always watching this video. Add to that the retail sales driven from the page -- because music videos are still retail advertising too -- and it starts to look okay. Ish.

This is driving change. NZ On Air still chips in $5000 for the cost of making a video -- the same amount since the 1990s -- but it now does so with no expectation of the video being played on television. NZ On Air-funded videos got eight and a half million views on YouTube last year. But four and a half million of those plays accrued to just one video -- Kimbra's  'Good Intent'.

So this kind of success is uneven. And it's likely to be a combination of the new, organic and unbidden -- and old-fashioned big marketing. This actually the story of what's happening now with Lorde. Her label, Universal, let her quietly put her debut EP, The Love Club, up on Soundcloud as a free download. They let those free downloads run to 60,000 before actually selling the record -- which promptly went to No.1 on the local charts and stayed there.

Five years ago, the idea of giving away that much music for free would have been anathema to a big record label. Doing it on a third-party platform where there are still many copyright grey areas, more so.

But going to the crowd on Soundcloud had another crucial effect. Because that was where a man called Jason Flom heard it and was moved to get in touch with Universal NZ. Flom has signed -- among many others -- Kid Rock and Katy Perry. When he hears something, everyone else listens too. Universal did a deal with his label, Lava. This is where Big Music did its stuff: pluggers took the record to radio, Lava paid probably half a million dollars for a wrap-around on Billboard magazine. This week, we find out whether 'Royals' is number one in America.

If it's not, that may well be because Miley Cyrus's risqué video for her new single 'Wrecking Ball' has helped her towards 35 or 40 million video and audio streams in a week. They all go toward the chart. Even -- get this -- the home-made videos put on YouTube by fans who ripped the song off the album. Instead of taking them down like they used to, rights owners license and account for them.

Through all this, the crowd is doing its unbidden, unmanageable thing. On YouTube, there are hundreds of fan covers of 'Royals': girls (and a few boys) doing the songs themselves. One or two have hundreds of thousands of views in their own right. And Lorde and her co-writer Joel Little make a speck of income off each one.

Do a Twitter search: you'll be struck by the sheer intensity of the fan engagement going on. It's daunting in itself. Some of it, you maybe don't want a 16 year-old to read.

But this is a once-in-a-lifetime event, on a scale not accessible to the vast majority of the creative and journalistic works that speak to, and are valued by, a local audience. Works without which we would be bereft.

Here's a story: We pride ourselves on our screen culture, but last year there were to be no New Zealand film awards. The film component was simply dropped from the AFTA Awards, probably because it wouldn't rate in any sensible TV timeslot. So Ant Timpson and Hugh Sundae got together and created the Sorta Unofficial New Zealand Film Awards: The Moas.

It went out live. Not on TV -- although Rialto got replay rights -- but, like Lorde, on a New Zealand Herald internet stream. And because the coverage followed the needs of the event, rather than vice versa, it was great fun to watch.

We seem to be seeing a confluence around the real-time event, and we should value that highly. Connect schools, sure. But I'd also like to see fat pipes into every auditorium in the land. Let's make the rooms bigger.

This doesn't mean there will be mass audiences. Maybe we need to get past the idea that a thing is only worth doing if it fills a virtual Eden Park.

Reality check: for every New Zealander who watched Lorde's live stream, a hundred watched Team New Zealand sail the following morning. On television. In a good week, ten times as many people watched my half-hour media programme, Media3, than watched Lorde. On television.

Earlier this year, a prop for a documentary following Lorde on her first American promo tour was taken to every New Zealand TV network. Every one rejected it. I suspect that had the offer come in this week, with 'Royals' still in the US Top 10, the reception might have been different. But it's a bit late now, isn't it?

And this is where I think commercial TV -- even though it still enjoys mass audiences and still largely makes money -- has a developing issue. It's increasingly risk-averse. We talk about the internet being the place for niche audiences, but it's less often recognised that the prime-time TV audience is itself a niche.

In its far-flung parts of the schedule -- late Wednesday night and Saturday morning -- Media3's ratings weren't bad. But it didn't look so good when -- as TV programmers must do -- you filtered out all the unwanted viewers, leaving you with the viewers in TV3's target demographic. The niche the advertisers needed.

The upshot is that our TV show -- which I like to think played a useful role in the national conversation -- no longer exists. NZ On Air would like to fund it, but there is no screen for us.

There's a relatively straightforward fix here: restore a public TV broadcaster and serve all those viewers -- anyone over 50, basically -- who were disenfranchised when TVNZ 7 shut down. That broadcaster be should set up to deliver to any screen as a matter of core purpose.

We can see some of the potential now, in Parliament TV. When the marriage equality bill was voted into law this year, many thousands of people watched it happen, on whatever screen. And they talked about it in real time, on Twitter and Facebook.

Ironically, it was a political strain of exactly the kind of engagement the networks are seeking -- and increasingly getting -- with shows like X-Factor, whose formats come with their advertising built-in.

But while a new public broadcaster might provide an opportunity for me, it's not going to help our blogs pay their way. And I don't think state funding of individual small publishers either practical or particularly desirable.

Neither, in most cases, is an exclusionary paywall. At our level, there's some potential in sponsorship relationships, especially in the context of events. That word again. But although some of the PR companies are well-placed and keen to broker such relationships, their clients can be reef fish.

And it doesn't necessarily work for sites like Auckland Transport Blog. The people behind that blog aren't just providing advocacy on transport and planning issues -- they're offering expertise to the rest of us, working journalists included. The same goes for Keith Ng and Graeme Edgeler, any number of people on Geekzone, any expert blogger. They're specific and valuable nodes in the social system. And they're largely doing it for free.

But there is another model. The subscriber radio model. My readers don't actually need much persuading that the argument for paying so that everyone can have nice things is a strong one. In the past two years, I've made more from asking them for a contribution than I have from advertising. Keith Ng has also had some success in asking readers to crowdfund his stories -- after he's published them.

But this needs a permanent structure, and it needs to work for all of us. One solution I see is this: a simple, voluntary subscription system which can be joined by any New Zealand website or blog at one end, and any reader at the other. In concept, it's simple. There would be some regulatory hoops to pass through.

But I'll talk to anyone who thinks they can help do this. Because these are tough and even troubling times for journalism and the arts.

I think patronage is an important concept in this new economy. On Public Address, we do very cheap ads for people in the arts. I'll try and editorially get behind things I think are worthwhile. By the same token, the creativity and eternal forbearance of our longtime developer, CactusLab, is a key reason Public Address still exists.

If you want local journalism and independent publishing -- on or offline -- think about how your company can help. If you use an agency, ask them to think outside the square in media-buying, instead of just dialling up a Facebook demographic. Exercise patronage. Get alongside good things with sponsorship. Don't ask for advertorial. If you do need commercial writing, you can offer it to journalists. Pay for the music you use. You can make things better.

I've learned a lot since I first tiptoed into that room. It's a place I come from, culturally. And we are all in this together. Let's bear that in mind. And help keep NZ General.

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