Author: Mathew Ingram

We’ve described a number of times at paidContent how publishers large and small are looking for alternative sources of revenue as traditional advertising declines in value, and how some sites — including The Atlantic, BuzzFeed and Gawker — are experimenting with new ad formats such as sponsored content or “native advertising,” as well as affiliate links. On Friday, Google engineer Matt Cutts reiterated a warning from the search giant that this kind of content has to be treated properly or Google will penalize the site that hosts it, in some cases severely.

In his post on the official Google blog, entitled “A reminder about selling links that pass PageRank,” the Google staffer notes that the company has repeatedly warned about the dangers of links — including those on advertorial pages — that are designed to pass some of the hosting site’s PageRank (in other words, its status in Google’s search index) to the company paying for the links:

“Please be wary if someone approaches you and wants to pay you for links or “advertorial” pages on your site that pass PageRank. Selling links (or entire advertorial pages with embedded links) that pass PageRank violates our quality guidelines, and Google does take action on such violations.”

Sites that host such content can be penalized

The penalties for doing this, Cutts says, including “losing trust in Google’s search results,” as well as a reduction of the site’s PageRank status, and lower rankings for the site in Google’s search results. The proper way to avoid this kind of penalty is to use what’s called a “nofollow” tag at the end of the URL for a paid link, which tells Google not to assign any PageRank to the page on the other side of that link.

According to Search Engine Land, the Google post may have been triggered in part by the behavior of a number of British local newspaper sites such as the The Worcester Standard and This Is Dorset, which were hosting advertorial content from an online flower-delivery service called Interflora. Even though the posts clearly say “ad features” and “advertisement,” the links to the company’s website and other related links don’t have the nofollow tag attached.

David Naylor, a consultant who specializes in search-engine optimization or SEO, described in a post of his own how the Interflora content had broken the rules, and how the company’s own PageRank had declined sharply as a result — and he also noted that the PageRank of the local news websites that posted the content hadn’t just declined, but had actually dropped to zero. According to Naylor, such a massive drop for a single infraction is unusual.

Sponsored content is growing in popularity

The Atlantic has been in the news recently for its experiments with sponsored content, including a large feature on the Church of Scientology that was widely criticized. The magazine later apologized for the piece and said it was amending its rules on sponsored content, but it’s not clear whether those rules include adding “nofollow” tags (the Scientology piece has been removed). A survey of some of the Atlantic’s recent sponsored content showed no links at all.

BuzzFeed is also known for its sponsored-content program — in fact, the site carries no traditional advertising whatsoever. The use of this kind of advertorial sparked a critical post from blogger Andrew Sullivan at his Daily Dish site, in which he suggested that blurring the line between editorial and advertising the way BuzzFeed does is unethical and disturbing (Note: We’ll be discussing alternative monetization methods with Justin Smith of the Atlantic, Jon Steinberg of BuzzFeed and Andrew Sullivan, among others, at paidContent Live in April).

All Google really seems to care about, however, are the links in this kind of content: in one of the sponsored posts that Sullivan criticized, about the launch of Sony’s PlayStation 4 console, a link to a contest Sony is running did not have a nofollow tag attached, but — like the Atlantic — many of the other sponsored posts we looked at on the BuzzFeed site contained no links at all.

In a post on Twitter, BuzzFeed founder Jonah Peretti said that all of the paid content that appears on the site goes through Google’s DART system (which is part of its Doubleclick advertising unit) and therefore doesn’t pass PageRank.

Post and thumbnail images courtesy of Shutterstock / Brian A Jackson and David Naylor

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Much has been written about the disruption taking place in the media industry as a result of the web and the atomization of content, but less has been said about how the advertising business — on which most of the media industry continues to rely — has been going through its own disruption. One of the seismic shifts that has been upending business models is the one that Twitter is trying to capitalize on with its API: namely, the increasing move towards “programmatic” or automated ad buying, as opposed to the traditional human-driven ad game.

This is about more than just some tinkering with the machinery that underlies the content we consume. As Felix Salmon notes in a post at Reuters, virtually every media entity — from behemoths like the New York Times to the smallest independent online player — is being forced to reinvent how they generate revenue because digital advertising is not paying the bills (Note: We will be discussing alternative monetization methods on a number of panels at our paidContent Live media conference on April 17 in New York).

Another battle between algorithms and humans

Like most of the other changes in the media industry, this shift didn’t just just happen overnight. Instead, it’s a wave or a series of waves that have been building steadily over the past several years. As with so many other elements of the disruption in digital content, Google arguably triggered this particular tsunami with the introduction of its search-keyword based auction process — an idea it borrowed from Bill Gross and Overture — but the ripple effects of that decision have continued to grow and expand in force.

In a nutshell, advertising has become yet another battleground for the fight between humans and algorithms: the human beings at ad-buying firms and ad networks who used to buy and sell banners and other traditional forms of advertising, and the algorithms that drive “programmatic” buying based on keywords, topics that are trending in social media and other factors.

As we described earlier, this is something the New York Times has been experimenting with via an in-house tool that tracks which stories are seeing the most activity on Twitter, and then offers advertisers the ability to insert their ads into those stories. It’s no longer about where that content appears in a physical product like a newspaper, or even what the story is actually about. Instead, it’s more about who is engaging with it, and where, and how.

Part of this shift is the transition from what some marketers call “outbound” marketing — which includes direct mail, banner ads and other methods that try to reach out and grab the attention of potential customers — to “inbound” marketing, which relies on search-engine optimization and other content-based strategies that make it easier for users to find a brand or advertiser without being bombarded by ads (Demand Media and other “content farms” have tried to apply this approach to content, with mixed results).

Hubspot, which specializes in inbound marketing, says it is more or less taking over the online world, and the consequences for traditional media companies are dire:

Automated buying vs. human-created content

So what does all this have to do with the Twitter advertising API? In a nutshell, the API is a way for companies to automate more of their ad spending. At the moment, the list of official partners isn’t that long, but it will presumably grow — and the API combined with Twitter’s self-serve ad platform will theoretically allow advertisers to promote tweets based on what is trending and where the activity is. Twitter is also likely providing a host of information around users and their interests.

This is essentially the same game Facebook is playing, and while Google doesn’t have an open API for Google+ yet, it is likely thinking along the same lines. For social networks, in which the content generated by users is almost indistinguishable from the advertising — and in the case of Facebook, actually becomes part of that advertising, through features like sponsored stories — offering tools that let advertisers automate their spending based on hard data is potentially far more lucrative than another generic banner ad.

The problem for many media companies is that this is a game they are ill-equipped to play: for the most part, they have little or no data about their users that can compete with the granularity that Facebook or Twitter can offer, and they have no APIs or other automated, self-serve features to offer even if they did have that kind of data. On top of that, brands are setting up newsrooms and becoming content publishers in their own right, and further disintermediating the media.

This is part of the reason why so many players like The Atlantic and even Gawker Media have been focusing on alternative methods such as sponsored content or “native” advertising or affiliate links. But as Salmon notes in his post, these kinds of approaches are often labor-intensive (if you want them to be effective), and therefore high cost. In some ways, the market seems to be bifurcating: on one side is a growing business driven by algorithms, and on the other is a human-driven business based on customized content. Is there room for both?

Post and thumbnail images courtesy of Shutterstock / Everett Collection and Borrell Associates

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One of the big stories in the media-blogosphere last week was a brouhaha over blogger Maria Popova’s use of affiliate links on her Brain Pickings blog, something critics such as Felix Salmon of Reuters argued was in conflict with her stated goal of keeping the blog advertising free. The debate that emerged was a microcosm of the discussions that have been going on for some time now around self-published blogging stars like Andrew Sullivan — who has staked his future on a user-driven subscription model — and the benefits and risks of monetization models like affiliate links and sponsored content.

Popova’s presence at the center of these ongoing debates is one reason why we are delighted to announce that she will be joining us at our paidContent Live conference in New York on April 17 to talk about these and other topics. The Bulgarian-born curator will be appearing alongside Andrew Sullivan and financial blogger Andrew Ross Sorkin, who runs the DealBook site for the New York Times, and you can find out more information about the conference here.

Andrew Sullivan took the media world by surprise before 2013 was even a week old, when he announced that he was leaving The Daily Beast and launching his own site, and would be relying on monthly fees from readers to support him and the team behind his blog The Daily Dish. He raised more than $300,000 in just a couple of weeks, and some readers donated far more than he was asking — as much as $10,000 in one case — to become members of the site.

Readers vs. advertising revenue?

In a similar way, Popova has said she prefers to rely on readers for support, although she uses a donation system rather than a monthly subscription. Both Sullivan and the blogger/curator have said they would rather be supported directly by readers instead of subjecting those readers to annoying advertisements, and that commitment is one reason why Popova’s use of affiliate links triggered some controversy — although the blogger has said she sees them as a way for readers to support her as well (and she has since added disclosure about them to her site).

Meanwhile, the broader debate over how writers should be compensated, and the impact of new content models, continues unabated: Is going solo like Sullivan or Popova have done something that only a select few superstars can do, or is it theoretically possible for many? How does that change the relationship between writers like Sorkin or analytical mastermind Nate Silver and traditional publishers like the New York Times? What are some of the ways traditional media outlets — and/or the writers who work for them — can take advantage of this disruption?

These and other questions are going to be at the top of the agenda for paidContent Live in New York, where we also have a broad slate of other fascinating panels and fire-side interviews to offer. If you’d like to be part of the group Jay Rosen has called “the people formerly known as the audience,” you can register and buy tickets here.

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There’s been a rush of optimism about Yahoo lately, thanks in large part to its new CEO, much-admired former Google executive Marissa Mayer. After a number of speeches about her broader strategy to reinvent the company, the new chief Yahoo unveiled a redesigned site on Wednesday — a relaunch that garnered a bunch of somewhat lukewarm reviews from the usual suspects. The reality is that Yahoo’s latest attempt to reinvent the old “portal” approach to the web might have made sense five years ago, but it is both too little and too late.

In a post announcing the launch at Yahoo’s “Yodel Anecdotal” blog, Mayer talks about how the site has been redesigned to provide a “stream” of news and information that scrolls onward for as long as a user might like, instead of just a big static chunk of headlines. As she puts it:

“Since streams of information have become the paradigm of choice on the web, we’re introducing a newsfeed with infinite scroll, letting you experience a virtually endless feed of news articles. Whether you are a sports fanatic or entertainment buff, you can easily customize your newsfeed to your interests.”

We have a news feed just like Facebook!

Mayer is right that streams have become the paradigm of choice, but that particular boat set sail a long time ago — Facebook first introduced the News Feed, which has become the go-to news and information source for hundreds of millions of people, in 2006. Twitter, the other news source that pioneered the real-time stream of information, was also created in 2006 and how has hundreds of millions of users. Facebook, of course, recently crossed over the 1-billion-user mark.

That’s not to say a company couldn’t reinvent the real-time news stream, it just means that if Yahoo plans to do so, it’s going to have to try a lot harder than if it had embarked on such a strategy four or five years ago. All the new Yahoo page appears to do is let headlines scroll beyond the little box that the site used to put them in, something that even newspaper websites — hardly the epitome of innovation — started doing a long time ago.

A more detailed post on the changes from Yahoo’s VP of product, Mike Kerns, describes a great new feature that lets users “click a button that allows you to share the story via email, Facebook, or Twitter.” If that strikes you as something dramatically new, then you haven’t been paying attention.

We have apps too, just like Facebook!

Mayer also talked about new “applications” that Yahoo has added, so that users can always see their updated weather and sports scores, something that again feels like a revamping of a decade-old strategy. The customized portal with tiny news and information “apps” was something that was popular years ago via players like Pageflakes and Netvibes — and Google went after it with iGoogle, an offering it recently decided to mothball. Why? Because it wasn’t providing nearly enough bang for the buck, presumably.

Yahoo is also boasting about the fact that you can now log in with Facebook and see all your friends’ birthdays and other activity — a feature that Facebook first started offering with its Facebook Connect platform launch almost three years ago, and one that is now used by hundreds of thousands of news sites. This offering is not only late, but reinforces how much of Yahoo’s strategy seems to rely on partnering with others, something that is at best an unlikely route to success.

Some supporters of the company argue that Yahoo could reach out to developers of apps that it could run on its home page or in user’s streams, in the same way that Facebook has built much of its success on top of game or app companies like Zynga. But can Yahoo offer anything even close to what Facebook can, either in terms of reach or revenue? And are new versions of Candy Crush Saga or Farmville really worth banking Yahoo’s future on?

It’s true that Yahoo still has hundreds of millions of loyal users, but then so does AOL’s dial-up business — in other words, there may still be value there, but it is in a process of gradual (and likely accelerating) decline. Yahoo Finance still has its fans, and so does the site’s fantasy sports offerings, but the reality is that its overall traffic has been falling, and tweaks to its home page offerings are not going to reverse that in any significant way.

In that sense, Mayer’s much-hyped relaunch of the home page seems a lot like adding a new coat of paint and some racing stripes to your old Chevy. It may make you feel better, but it’s not going to go any faster.

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We’ve written about how social media and the “democratization of distribution” that the web allows has turned companies like Tesla into media entities in their own right, and has done the same thing for armies during conflicts like Israel’s recent attacks on the Gaza Strip. In the same vein, social tools allow governments to become media entities as well — and according to a piece at Politico, the Obama administration has adopted those tools with a vengeance. But is that a net benefit for democracy, or an attempt by the government to control the press?

President Obama, who was celebrated by some as the “first internet president” after taking office — thanks to his use of a BlackBerry, as well as various web-based open government initiatives — has showed even more flair for the web and social media in the past year or so, in part by hosting events such as the Twitter town hall in 2011 and a Reddit “Ask Me Anything” feature during the election campaign last fall, in which he took questions from users of the online community.

More open, or more controlling of the media?

While all of these tools and strategies make the president seem more approachable and human to some, however, to members of the traditional press it is part of an attempt by the Obama government to do an end-run around the media and get its message out directly without any fear of being challenged (although the traditional media seem to have had no problem covering up the existence of a drone base in Saudi Arabia when asked to do so). According to Politico:

“President Barack Obama is a master at limiting, shaping and manipulating media coverage of himself and his White House [and] the mastery mostly flows from a White House that has taken old tricks for shaping coverage (staged leaks, friendly interviews) and put them on steroids using new ones (social media, content creation, precision targeting).”

As the Politico piece notes, governments have always tried to engineer their own messages, whether through hokey PR stunts like Calvin Coolidge’s radio addresses or government-produced propaganda shown in movie theatres, or through friendly reporters who are willing to write uncritically — as many have accused writer Judith Miller of doing at the New York Times when she covered the build-up to the Iraq War. But social media provides so many more tools (and real-time ones) for governments to use.

Just as Elon Musk of Tesla used his blog — and all the user data that his electric car produced during a New York Times review — to argue his case against the newspaper, the Obama government has almost as many tools (if not more) at its disposal as any of the media entities it used to rely on for coverage. It can produce and distribute news stories, audio interviews and video clips just as well as anyone, and media companies who have cut costs are always looking for free content. One photographer said the White House has “built its own content distribution network.”

The balance of power has shifted

As Politico describes it, the “balance of power between the White House and the press has tipped unmistakeably towards the government.” The Obama administration is said to be eschewing unscripted scrums in favor of orchestrated media campaigns like the Reddit AMA, which was widely criticized for not being as hard-hitting as a traditional interview (although I took issue with that description). Former Clinton-era press secretary Mike McCurry told Politico:

“The balance of power used to be much more in favor of the mainstream press [but now] the White House gets away with stuff I would never have dreamed of doing. When I talk to White House reporters now, they say it’s really tough to do business with people who don’t see the need to be cooperative.”

That word “co-operative” sums it up in a nutshell: in the past, governments had to co-operate with the media because they needed it to get their message out, just as companies like Tesla used to. But that’s not the case any more — or at least not as much as it used to be. The playing field has been levelled. Is that a good thing or a bad thing for democracy, or for society in general? Is more information better, even if it comes directly from the government?

Images courtesy of Shutterstock / Picsfive and Flickr user jphilipg

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We spend a fair amount of time criticizing traditional media players like the New York Times for not being innovative enough, relying too much on paywalls for revenue growth, and other perceived failings — so I think it’s only fair when we recognize things that they do that are innovative and interesting, and a new ad product it has launched definitely falls into that category. In a nutshell, the newspaper is selling advertisers the ability to target their ads based on whether a story is trending on Twitter.

Michael Zimbalist heads up the NYT’s research and development arm, and described the new advertising venture — which is called “Sparking Stories” — at a conference on big data put on recently by Beet.tv. According to Zimbalist, it came out of a new unit of the NYT R&D lab that is designed to commercialize the research done there, and is based on a social-media analytics tool the Times has been using for some time called Cascade.

In a nutshell, Cascade is the newspaper’s in-house version of Twitter’s trending topics: it allows the NYT to track which stories on its site are being shared heavily through social media, information that is used by both editors and reporters as a way of seeing how much traction their content is getting with readers. The new “Sparking Stories” advertising product gives advertisers the ability to place their ads inside those specific stories. Said Zimbalist:

“We developed this tool that lets us see what stories are trending, so now we’ve created an API that lets our ad server talk to this tool, and we’ve created an ad product called Sparking Stories, where an advertiser can come in and buy a package of stories that are trending right now on Twitter, irrespective of section or context or topic — just the stories that are really breaking through right now on social media.”

Zimbalist notes in his interview with an analyst from Forrester Research that the original head of the NYT’s digital arm, Martin Nisenholtz, had an advertising background before he joined the newspaper, and says he “realized the promise of this medium was going to be targeting based on data,” something the paper has always done through fairly traditional means: namely, separating registered readers based on gender, zip code, age, etc.

But what Spark allows the newspaper to do is much more interesting: it focuses not on age or gender or zip code — things that may be irrelevant (or at least less relevant) for some advertisers who want to target specific content topics — and instead focuses on what content is being talked about the most. Although Zimbalist doesn’t say what the paper charges for this product, that ability could theoretically be much more valuable than a standard display ad.

At a time when the advertising business is undergoing a tremendous upheaval, forcing media companies to experiment with everything from affiliate links to sponsored content, it’s nice to see the Times focusing on how it can use technology and data to push traditional advertising into the future a little bit. (Note: We are going to be discussing new forms of monetization for content at our paidContent Live conference in New York on April 17).

Images courtesy of Shutterstock / noporn and Flickr user Robert Scoble

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If you’ve been following the back-and-forth recently between pioneering electric-car maker Tesla Motors and the New York Times — which published what the company thought was an unfair review of its vehicle — you know that it has become a war of words in which both sides are claiming the moral high ground and using every tool at their disposal to win support for their position. What’s interesting about this incident from a media perspective is that the two sides are far more evenly matched than they would have been at almost any other time in history.

As my GigaOM colleague Katie Fehrenbacher has pointed out in her overview of the story, what started out as a simple review of the Tesla S — and a demonstration of Tesla’s new “supercharger” stations on the Eastern seaboard — turned into a massive PR battle between the company’s CEO Elon Musk and the newspaper and its reviewer, John Broder. Musk alleged that Broder wasn’t totally truthful in his review, and the NYT responded both with a defensive piece from Broder and an investigation by Margaret Sullivan, its public editor.

Tesla is also a media company now

Electric cars like the Tesla S may be fairly new, but companies getting upset about the way they are portrayed in the media probably dates back to when the news first arrived on clay tablets. What’s different now is something Dan Frommer put his finger on in a post, and something we’ve pointed out a number of times before — in a very real sense, Tesla Motors is a media company with all (or at least most) of the same tools of influence at its disposal as the New York Times. Says Frommer:

“Even a few years ago, something like this probably would have required finding a rival newspaper — the Wall Street Journal, perhaps — to collaborate on a takedown. Or maybe an expensive full-page ad campaign in the top five papers, which would have looked defensive and seemed less convincing. But now that every smart company has a regularly updated blog… brands can speak for themselves very powerfully.”

Blogging pioneer Dave Winer likes to call this phenomenon “the sources going direct,” and what he means is that people and entities that used to be seen primarily as sources of information for the news media to make use of — whether a company or a politician, a celebrity or an entity like WikiLeaks — have the ability to reach out to potential supporters and detractors directly, without having to go through traditional intermediaries like newspapers or journalists, or even marketing firms and public-relations advisors.

In a very real sense, everyone is a media entity of some kind now. That doesn’t mean someone with a few hundred followers on Twitter is the equivalent of the New York Times, but it does mean that a large corporation like Tesla Motors is on a much more level playing field with the newspaper than it would ever have been before. In the past, if Tesla didn’t like a review, it could a) call and complain, b) put out a press release and try to get a competitor interested in a story c) launch an expensive lawsuit (which Musk has also done in the past).

What happens when the sources go direct?

Does this levelling of the playing field make things better or worse? That depends on your perspective. If you’re the New York Times, it is definitely worse, since everything you write is now subject to criticism — criticism that in some cases may get more attention than the original piece (which is one of the reasons Margaret Sullivan’s job as public editor exists). If you’re Tesla Motors or any other commercial entity, however, it’s an unprecedented opportunity to shift the balance of power.

Corporate PRs everywhere are reading @elonmusk 's NYT take down and thinking 'hmm'

—
emily bell (@emilybell) February 14, 2013

And what about society, or journalism in general — is it better off when this happens? There are two ways of looking at that question too: if you want to make it easier to figure out who is right and who is wrong, the current state of affairs isn’t going to help. The only thing that becomes obvious from the back-and-forth between Tesla and the New York Times is that it’s very difficult, and perhaps even impossible, to tell who is right on specific points. Some political topics are also arguably getting harder to understand rather than easier.

If you operate on the principle that having more information and points of view is usually better, however, then it is almost certainly a good thing to have every actor and politician and CEO become a media entity — even if that makes the media business itself a lot more complicated.

Images courtesy of Shutterstock / saiko3p and Flickr user Yan-Arief Purwanto

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There’s been a lot of sound and fury recently about a blogger named Maria Popova, who makes her living by curating links to smart content on her Brainpickings blog. Popova has been quite vocal about how she doesn’t like traditional advertising and instead relies on donations from her readers, in much the same way that former Daily Beast blogger Andrew Sullivan now does. But that commitment was recently challenged by an anonymous critic who noted that Popova also gets revenue from affiliate links to sites like Amazon — and the resulting debate says a lot about the future of both content and advertising.

One of the reasons why this incident has drawn so much attention is that Popova seems like a great example of the kind of self-sustaining media entity many bloggers — and even traditional journalists — aspire to become. While she may not be in the same league as Sullivan, who employs a team to run his Daily Dish blog (and who will be speaking at our paidContent Live conference in New York on April 17), the idea that someone can make a living by simply curating excellent content in return for donations is inspiring.

Are affiliate links a sneaky form of advertising?

The Popova case has also become a flashpoint because as traditional advertising becomes less lucrative, publishers are turning to alternative forms of advertising such as “native” or sponsored content — something that caused a similar firestorm of criticism for The Atlantic recently — as well as affiliate-related content. Gawker is hiring writers to create what it calls “commerce journalism” that is designed to drive revenue from affiliate links. But standards on disclosure and other elements of these new forms of advertising are all over the map.

In a number of profiles, including a glowing one in the Sunday New York Times, Popova comes across as a highly intelligent and motivated individual — a former recreational bodybuilder from Bulgaria who started Brainpickings as a way of collecting interesting links to books and other content. The reputation of the blog seems to have spread fairly quickly, to the point where luminaries like former State Department official Anne-Marie Slaughter said they support her through donations in the same way they support National Public Radio. And Popova has said repeatedly that she is proud to be advertising free:

“It doesn’t put the reader’s best interests first – it turns them into a sellable eyeball, and sells that to advertisers. As soon as you begin to treat your stakeholder as a bargaining chip, you’re not interested in broadening their intellectual horizons or bettering their life. I don’t believe in this model of making people into currency. You become accountable to advertisers, rather than your reader.”

That rosy picture got a little blurrier over the past couple of days, however, after an anonymous blogger posted on Tumblr about Popova’s liberal use of affiliate links — that is, links to books and other products on e-commerce sites (primarily Amazon) that provide her with a payment if one of her readers clicks through. The anonymous blogger extrapolated from Popova’s traffic numbers and estimated that she could generate between $200,000 and $400,000 a year from those links.

.@underoak @moorhen blogs that bring in money should have on-site disclosures about where it is coming from. cc @brainpicker

—
Staci D Kramer (@sdkstl) February 14, 2013

Disclosure is always better if you want trust

Given that kind of income — from something that is pretty clearly a form of advertising, although perhaps a non-traditional one — the Tumblr critic argued that Popova’s claim to be “advertising free” is clearly inaccurate. He also argued that some of her donors might think twice about giving her money every month if they knew that she was deriving a substantial amount of income from affiliate links, something that Popova doesn’t disclose before or after a reader clicks on one of those links.

Reuters blogger Felix Salmon followed up with a post about Popova, repeating some of the financial claims made by the Tumblr critic (who has since revealed himself to be Tom Bleymaier, founder of a startup in Palo Alto, Calif.) and adding some of his own. Popova has since responded to both Salmon and Betabeat — which also published a critical post about her practices — saying she doesn’t see affiliate links as advertising, is open about using them, and doesn’t make anything close to what Bleymaier said she does.

“Those numbers are ludicrous! If Amazon gave me even a tenth of that a year after Uncle Sam takes his fair share, I’d be delighted. I’ve been completely honest about the Amazon links with anyone who’s ever asked – and have many, many, many emails I’m happy to forward – and have brought it up myself multiple times in talks and on Twitter.”

Many of Popova’s supporters have said they are happy to have her get revenue from her writing in any way possible, and don’t mind the lack of disclosure about her use of affiliate links. Others, however, have questioned why she wouldn’t attach a simple disclaimer to her site — especially on the donation page — to note that she uses them (and some have even pointed out that this kind of disclaimer is arguably required by law, due to FTC regulations on disclosing marketing-related content).

I think the main point that Salmon makes in his post on the issue is a good one: namely, that if you are relying on donations from your fans for your livelihood — as Sullivan is, and others such as musician Amanda Palmer are — then it behooves you to be as open as possible about your financial arrangements, in the interests of increasing the trust your readers or fans have in you. Sullivan and Palmer have both been extremely forthcoming about their financial situations, an approach Popova might want to imitate.

Images courtesy of Shutterstock / Igor Steganovic and Brainpicker

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Clay Christensen literally wrote the book on disruption, so it’s worth paying attention to him when he talks about where the disruption fueled by the web is going to strike next. The Harvard business professor and author of The Innovator’s Dilemma spoke to Jeff Howe — the Wired writer who coined the term “crowdsourcing” — and had some interesting things to say about where disruption is occurring now and where it is likely to strike next.

At one point, Howe asks Christensen to name some industries that are “either in a state of disruptive crisis or will be soon,” and the professor says:

“Journalism, certainly, and publishing broadly. Anything supported by advertising. That all of this is being disrupted is now beyond question. And then I think higher education is just on the edge of the crevasse. Generally, universities are doing very well financially, so they don’t feel from the data that their world is going to collapse. But I think even five years from now these enterprises are going to be in real trouble.”

Christensen recently co-wrote a study for Nieman Reports entitled “Breaking News,” which focused on the media industry and the disruption< that is going on there. He also described some of his thinking about what has happened to the newspaper and traditional media business in an interview with the Nieman Journalism Lab — in which he said that many newspapers were lulled into a false sense of security and then “very quickly, all of a sudden, you go off the cliff.”

When it comes to education, Christensen said that the availability of fairly high-quality online learning would be the disruptive force because “it will take root in its simplest applications, then just get better and better.”

“You know, Harvard Business School doesn’t teach accounting anymore, because there’s a guy out of BYU whose online accounting course is so good. He is extraordinary, and our accounting faculty, on average, is average. Some [universities] will survive. Most will evolve hybrid models, in which universities license some courses from an online provider like Coursera but then provide more-specialized courses in person.”

For more on the question of disruption in education, see the ongoing debate between media theorist and journalism professor Clay Shirky and Aaron Bady, a PhD student in African literature at the UC Berkeley. Shirky started it with a piece about the disruptive effect of “massively open online courses” from companies like Udacity, and Bady responded with a rebuttal, followed by a response from Shirky.

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As we argued in a recent post about how publishers can make the most of their star writers — including offering “pay walls” around specific authors — the way we consume news and other content is changing, in the sense that individual brands are as important (or possibly even more so) than publishing brands. Now a Dutch publisher is betting the future of his business on that model: De Nieuwe Pers, or The New Press, has just launched a mobile app for iOS that allows readers to subscribe to individual writers.

The New Press is funded by publisher and CEO Jan-Jaap Heij and a partner, and arose from the ashes of a previous free newspaper called De Pers or The Press. After about five years of operation, the paper was forced to shut down last year as a result of losses incurred during the financial crisis in Europe, Heij told me in an interview from The Netherlands — but instead of closing its doors entirely, the editor decided to create a new entity with many of the same staff and focus solely on mobile news and content.

Readers can subscribe to one writer or a package

Launched on Monday, the New Press app is powered by a company called imgZine, and allows users to pay about $2.50 per month or $23 per year for a subscription to the entire output of a specific author or journalist, or about $6 a month and $50 per year for a package of all the writers who are currently being syndicated through the platform — a total of 11, according to Heij, with a goal of having more than 50 by the end of the year. In the future, he said, The New Press may also offer packages of writers focused around specific topics such as sports or crime.

Although it is still early, Heij says there has been a substantial amount of interest in the app, and not just from users but from journalists and writers as well. As part of its deal with the authors that it distributes, The New Press shares 75 percent of the subscription revenue with them (after paying Apple its 30-percent cut), and if they get 500 or more subscribers to sign up, they get 85 percent. “We have had about 200 people approach us about being part of the service,” Heij says. “After the launch, my mailbox just exploded with requests from journalists.”

Why did The New Press decide to offer a subscription feature for its writers instead of going the traditional route of a blanket paywall or just a charge for the app? Heij says he believes that media is becoming much more about individual brands than institutional ones, and The New Press wanted to take advantage of that phenomenon:

“As we see it, people are now starting to follow journalists as brands and not the media they work for. A lot of journalists have way more followers on Twitter and Facebook than the brands the media company that publishes them, and I think it’s because people want to hear individual voices, not institutional voices. Media brands are losing power and personal brands are becoming more important.”

Heij said that while individual writers have always had strong personal brands, “it’s far more easy than it was even 5 years ago to publish yourself” and build your own following — to the point where some writers such as star blogger Andrew Sullivan have severed any ties to a traditional media outlet and set up their own publishing operation driven by subscriptions.

Maybe not the only answer, but one of many

The New Press publisher said that the current selection of writers is a mix of established or “star” names from different sectors of the journalism market, as well as newer writers who show promise and are willing to experiment. All sign freelance contracts with The New Press, and while they don’t require a certain number of articles per week or per month, Heij says that the expectation is that they will work hard for their channel or “one push of a button and they are gone.”

Some of the content related to its writers is free, the New Press publisher said — such as blog posts from other sites or their Twitter stream, for example — but the majority is behind the subscription wall. Some journalists have been using the service to publish their older material from other sites, he said, while others are writing daily or weekly pieces specifically for The New Press, and some are a mix of both approaches. The New Press also has staff writers who do a live-news blog that is free to users.

So is the personal subscription model the future of media? The New Press publisher says he isn’t prepared to go that far, but he thinks it will be a crucial part of the future of content:

“We see ourselves as a combination of a newspaper, a news app and a publishing platform. People have asked me whether this is the answer to the crisis in journalism and I have said I don’t think it’s *the* answer, but it is one possible answer.”

Heij, who made a substantial amount of money investing when he was younger, says that he and his partner have invested about 100,000 Euros in The New Press, and the venture also raised about 25,000 Euros through a crowdfunding effort to launch the app. “I’m quite certain we will lose money at the start, because everything you do in media tends to lose money at the start,” he said. “But I am optimistic that this could turn out to be a very significant business.”

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With a few exceptions, the paywalls and subscription plans that have been erected by hundreds of newspapers and other publications over the past year share one quality — namely, they ask readers to pay a single amount for everything that is published, regardless of what those readers are interested in. What else could these publications do? Here’s one suggestion: Why not monetize individual writers? Doing do could build stronger relationships with readers that would create more long-term value, and possibly prevent some star writers from going the Andrew Sullivan route.

This might not be easy to do — especially since many media outlets seem to have their hearts (and wallets) set on paywalls as a solution — but the industry is in such dire straits at this point that almost any reasonable idea probably shouldn’t be ruled out. Some publications are betting on sponsored content, some are relying on real-world events and others are looking at affiliate links or “brand journalism.” Why not personal paywalls? (Note: We’re going to be talking about alternative monetization strategies at our paidContent Live conference in New York on April 17).

Why personal paywalls? Getting to know readers

I’ve tried to argue in the past that one of the biggest weaknesses of traditional paywalls or subscription plans is the undifferentiated quality they bring to a newspaper’s content: everyone hits the same wall and is asked to pay the same amount, regardless of their interests. This reinforces one of the overall weaknesses many traditional publishers have, which is that they know virtually nothing about their readers — or at least not enough to take advantage of that knowledge in any meaningful way. They are about as personalized as a street-corner newspaper box.

This is important because advertisers in particular are looking for personalized targeting, which is one of the reasons they are looking to new providers such as Facebook and Twitter for their business — those outlets can give them targeting based around an almost infinite number of variables, from income and geographic location to voting behavior. In other words, newspapers and other traditional outlets would benefit from getting to know their readers better in just about any way they possibly can.

One of those ways is to take advantage of the increasingly social nature of media in a digital age, and build monetization strategies around individuals rather than the artificial package of news and other content known as a newspaper. Many readers — particularly younger ones — consume media based not on corporate brands but on individual writers that they feel a connection to, and I would argue that is becoming the norm. We read the New York Times as much for Tom Friedman or Nick Kristof as we do because it is the NYT.

Five ways to create a personal paywall

Not all of these will apply to every writer at every publication, but many will. The overall idea is to take a lesson from the music industry in how to make money from content — the music business has spent a decade figuring out (painfully) that the songs themselves are not what people want to pay for. What they want to pay for is access to artists, both virtual and physical, and for ways of deepening that relationship. So here are some ways newspapers could take advantage of the same principle:

1) Allow readers to pay for an all-in-one package: If what readers identify with is Nick Kristof at the New York Times or Walt Mossberg at the Wall Street Journal or Felix Salmon at Reuters, then give them a way to get that writer’s content — in whatever form — in one easy package. Maybe they blog, write news stories, do video interviews, post on Twitter, etc. Provide all of that for a fee, and make it as appealing as possible and as easy as possible for readers to find and consume it.

2) Create new forms of specialized content: Maybe your wine correspondent is the star attraction for many readers — so why not provide early access to their reviews for readers who sign up for a membership in a personal paywall plan? This is also a model that many musicians have used to their advantage, by providing early access to music (or to better quality files) for members of a fan club.

3) Host live events featuring your writers: Plenty of publications, including The Atlantic and the Texas Tribune, are looking to monetize their content by putting on events that appeal to readers. But not everything has to be a 500-person conference — why not have smaller events that cater to a more exclusive reader group, where they can listen to an interview with a prominent figure in a particular area, and then mix and mingle with other readers who share their interests?

4) Create a virtual community worth paying for: Plenty of newspapers have topic pages or even author pages, but they do little to develop a real feeling of community for readers that justifies an extra fee. This is about more than just content — it’s about providing user forums, or wiki pages about a topic that readers (who pay a membership fee) can contribute to, or a chance for a one-on-one discussion with the writer. In other words, a real community that the writer in question is a part of.

5) Provide access to your writers’ expertise: If you have a writer who has some specialized expertise, whether it’s financial analysis or political savvy or technological knowledge, why not let them provide some of their professional advice to paying customers? This would be similar to a service like Gerson Lehrman or a startup called Clarity, where people buy a specific amount of time to ask an expert questions. Some might see this as a conflict for journalists, but it doesn’t have to be if it’s handled properly.

Offer your core readers more, not less

The bottom line with all of these suggestions is to look at membership or a subscription as a way of offering your readers more than just the regular news and content that you publish — an approach similar to the “reverse paywall” model that Wall Street Journal deputy managing editor Raju Narisetti and journalism professor Jeff Jarvis have both suggested in the past. This bases the monetization on a relationship with readers that is focused on rewards, not just putting up a paywall that everyone runs into after a certain number of pageviews.

Will this prevent some star writers from doing what Andrew Sullivan did and going solo? That’s not guaranteed, but if a writer sees themselves as being in partnership with the newspaper or magazine they write for — something that might even include a share of the extra revenue from the personalized-rewards model — they might be less likely to consider setting up shop on their own, especially if they saw a benefit from the marketing muscle that mainstream publications can provide.

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It’s been almost a month since hacker-activist Aaron Swartz took his own life at the age of 26, driven — according to those who knew him — by a combination of depression and the threat of jail time. The latter was a result of federal charges under the Computer Fraud and Abuse Act for an incident involving documents he downloaded from the JSTOR research archives. While proposals have been made for changes to the law as a result of his death, it’s important to think about all the other hackers who might be caught by the same net, even if they aren’t as appealing as Swartz.

In the wake of his suicide, Swartz’s case quickly became a cause celebre, and a group of legislators including Darrell Issa (R-Calif) — who was also instrumental in the fight against SOPA and PIPA — recently asked the Justice Department to look into the behavior of the U.S. attorney’s office in pressing for a severe penalty against the young hacker. Zoe Lofgren (D-Calif.) has also proposed a number of changes to the Computer Fraud and Abuse Act that would prevent the state from going after others for what Swartz did.

Breaching terms of use shouldn’t qualify as hacking

Among other things, those changes — some of which were proposed by users of Reddit during a session with Lofgren last month — would prevent prosecutors from pressing charges for simple breaches of a website’s terms of service or user agreement, which is one of the clauses in the CFAA that was used against Swartz. Changing a computer’s hardware address (which Swartz did in order to avoid detection) would also not qualify as criminal hacking.

But while Aaron Swartz’s experience has drawn some much-needed attention to the problems with outdated laws like the Computer Fraud and Abuse Act — which was written in 1986, before the web was even invented — we shouldn’t forget that others have also been hit with this overly broad and vague piece of legislation, even though they haven’t become popular causes in the way that Swartz has.

As Marcia Hoffman of the Electronic Frontier Foundation has pointed out, one of the most problematic parts of the CFAA is that the law makes it a crime to access a computer or website “without authorization” or in a way that “exceeds authorized access,” but those terms are never really defined. In a number of cases, prosecutors have defined them to mean that anyone accessing a web-based service in any way that isn’t explicitly approved by the terms of use is committing a crime under the act.

A broad and overly vague legal net

In 2008, for example, prosecutors used this aspect of the law to go after a woman who created a MySpace profile using an assumed name (although a judge declined to hear the case) — and as one security researcher has explained, the same principle could easily be used to charge anyone who simply goes to a website without the explicit permission of the owner.

One of those who has been caught in this particular net is almost the polar opposite of Aaron Swartz, although both were clearly hackers: Andrew Auernheimer, who is known by the online handle Weev, has also been found guilty and is facing potential jail time for unauthorized access to a computer or web service. In his case, Weev and a fellow hacker collected a list of AT&T customer email addresses by generating random URLs at the AT&T website, and then gave them to Gawker in what they said was an attempt to draw attention to AT&T’s lax security measures.

Unlike Swartz, who has been hailed by most of his friends and acquaintances — including luminaries such as Creative Commons founder Lawrence Lessig and even the creator of the World Wide Web, Sir Tim Berners-Lee — as a force for good and a crusader for openness and other just causes, Weev is somewhat notorious for being an online troll who reportedly delights in causing mischief, aggravation and hurt feelings wherever he goes.

Being a troll shouldn’t qualify as hacking either

All of that may make him less than appealing as a public cause, but the flaws in the Computer Fraud and Abuse Act are just as obvious in his case: in fact, what Weev did barely even qualifies as hacking, since he simply generated random iPad ID numbers and then used those to get the AT&T email addresses. In other words, the addresses were freely available and not hidden behind technological locks or passwords of any kind (Weev also made no attempt to use them or sell them).

The bottom line is that the CFAA isn’t worth scrapping or rewriting just because it was used to go after Swartz, or even Weev — the biggest issue is that it is so broad and technologically ignorant that it can be used to criminalize behavior that should barely even register as a nuisance, let alone a crime. Swartz’s downloading of JSTOR documents wasn’t serious enough for the archive to press charges, and yet the prosecutor chose to threaten the young hacker with jail time.

At its best, hacking of the kind that both Swartz and Weev engaged in is no different than the kind that Microsoft founder Bill Gates employed when he let lose a worm that shut down a corporate computer network when he was 14. Within reason, testing the limits of computer systems and revealing security holes is something for which we should be thanking hackers — or possibly admonishing them — not sentencing them to prison terms.

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The social web has been around for more than a decade now, but even after all that time, no one has quite figured out how to fix online comments. Some bloggers have given up trying and don’t allow comments at all, while others have turned their communities over to Facebook, only to find that doing so makes things worse instead of better. Jeff Atwood, one of the founders of the online geek community Stack Overflow, has launched a new commenting system he hopes will help solve one of the crucial problems — namely, trust. But is it even possible to automate that process?

Atwood, who left Stack Exchange — the company that manages Stack Overflow and a number of other similar sites — about a year ago, launched his new venture on Tuesday with a blog post in which he lamented the fact that commenting and user forums have not changed much in the past decade. The vast majority of these platforms, he says, still fail to capture real conversation and are too difficult or expensive to implement.

Figuring out who to trust is the holy grail

The Stack Overflow founder says his new platform, which is known as Discourse, differs from other commenting systems in a number of ways — including the fact that it is fully open source. Atwood used the blog-publishing platform WordPress as a model (see disclosure below), and says the company will rely on selling hosting, support and other services for revenue.

Discourse has raised funding from a group of venture backers including Greylock and SV Angel, although Atwood wouldn’t say how much (another hosted commenting solution, Livefyre, also just closed a round of financing).

In addition to some other innovations, such as links that automatically expand within a comment (in the same way Twitter’s “expanded tweets” do), Atwood says he is trying to build a reputation system that will grant users new abilities based on the level of trust the platform has in them. Although he doesn’t provide a lot of detail, in a comment on a Hacker News discussion thread he suggests that it will be based on behavior such as flagging abusive posts.

Measuring trust and rewarding good behavior is something online communities have been trying to do for years, with mixed success. Some believe that sites like Slashdot — which has a moderation platform that awards “karma points” for certain behavior and appoints moderators automatically — have a good solution to the usual problems of trolling and flame wars, while others argue that these systems are almost always fatally flawed. Metafilter (which charges users $5 to become members) has many fans, but it is also a relatively small community. Branch is another attempt to reinvent user forums and discussion as invitation-only hosted conversations.

Trust takes effort, not just algorithms

Atwood says he wants to use a badge system for rewards (something Huffington Post also uses), but Gawker founder Nick Denton said in an interview last year that a similar reward system his sites used was a “terrible mistake,” because it was easily gamed and encouraged the wrong kinds of behavior. Denton has since completely revamped Gawker’s commenting system in an attempt to make reader comments the centerpiece, as well as a potential business model.

As my colleague Jeff Roberts noted in a recent post, the Huffington Post has also launched what it hopes will be a new feature called Conversations, which allows popular comments to become full-fledged blog posts of their own. The Verge — a tech blog run by Vox Media — is doing something similar with its site, in order to try and encourage more discussion and community. But both take a lot of manual effort.

Veteran blogger Anil Dash pointed out in an insightful post in 2011 that one of the only ways to maintain and encourage a healthy conversation — regardless of what platform you use — is to be involved in those discussions yourself as much as possible (a point Bora Zivkovic of Scientific American also made recently). Unfortunately for publishers looking for a quick or inexpensive fix, that kind of engagement is almost impossible to automate.

Disclosure: Automattic, the maker of WordPress.com, is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

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Plenty of newspapers have been jumping headlong into the paywall business recently, and many of them claim that the introduction of subscription plans has been the best thing that ever happened to them. Not everyone is quite as enthusiastic, however: Digital First Media CEO John Paton, for example, makes it abundantly clear in a blog post announcing his chain’s new strategy that he would rather be doing just about anything else than tinkering with paywalls, but he is doing so anyway.

Paton, who took over Digital First Media in 2011 and has published a number of manifestos about the need to put the web first — both at DFM and in his previous job at the Journal Register Co., a unit of DFM that recently filed for bankruptcy for the second time in 4 years — starts his announcement by saying he doesn’t like paywalls and thinks most publishers are implementing them incorrectly (Note: We are going to be discussing paywalls and other forms of monetization at our paidContent Live conference on April 17 in New York). As Paton puts it in his post:

“I think they can be a dangerous management distraction to the real job of adapting a legacy business to the realities of an Internet world… you don’t transform from a broken model by tweaking it – you build something else. I think paywalls, meters if you like, are exercises in tweaking not transforming. Most paywalls in the US are simply initiatives in subscription price hikes – bundling digital with print with no clear plan for sustainable growth.”

That said, Paton admits that since he is the CEO of a company that needs to find new sources of revenue, he is experimenting with paywalls, or what he calls “the Subscription Project.” Part of this involves trying to fix the existing paywalls or subscriptions plans at some of the chain’s newspapers — paywalls that Paton inherited when he took the job of CEO (when paidContent’s Staci Kramer interviewed him about what he planned to do with them, he said they would remain until he figured out whether they worked).

Digital First is experimenting with a Google survey

Paton says in his post that the performance of these paywalls at 22 of the company’s newspapers was “abysmal.” After watching them for a year, he says they had brought in just $300,000 in revenues — not enough to make a difference at a company whose annual revenues are close to $1 billion. Paton says this failure is now internally referred to as “Paywall 1.0.” The second version of this effort is coming soon, the Digital First CEO said, after doing some research with paywall operator PressPlus into best practices around charging subscribers for digital content.

Meanwhile, Paton said the company is also experimenting with a different kind of wall around some of its content — namely, a “survey wall” operated in partnership with Google and its consumer survey unit. At all 75 newspapers belonging to DFM’s MediaNews Group unit, a group that includes the Detroit News and the Denver Post, readers will be asked to fill out a short survey after reading a certain amount of content. Google has been promoting this idea as an alternative to traditional paywalls.

According to Paton, the Google survey experiment is beating the paywall experiment in terms of revenue growth, although he adds that both “cause traffic issues.” And he said Digital First Media is planning a future test that will combine digital subscriptions for some of the chain’s print products and mobile apps with Google’s survey wall. In the end, he says:

“It is too soon to say what will work and what won’t. But I think we can say that emotional arguments over what something is worth in a market economy is a near worthless waste of time at the expense of finding real solutions to the problem.”

With Digital First Media now experimenting with paywalls, and the Washington Post — another prominent holdout on the idea — reportedly considering a subscription wall as well, it looks like the only major players who remain steadfastly against the trend are The Guardian in Britain and USA Today, where publisher Larry Kramer has confessed that the paper simply isn’t unique enough to convince people they should pay money for it.

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The potential benefits of “big data” have been well described, both by us and others: the ability to spot flu trends earlier and potentially save lives, for example, or to make it easier for companies to provide services in a more personalized way. But these same tools could also be used for more disturbing purposes that smack of Orwell’s Big Brother, and two prominent digital skeptics — Nicholas Carr and Evgeny Morozov — recently raised warning flags about that prospect. Which kind of future will we get?

Carr looked at a recent speech from PayPal co-founder Max Levchin at the DLD conference in Germany (one Om also attended, where he conducted an in-depth interview with Levchin) and clearly didn’t like what he saw. Levchin’s view of people, according to Carr, is that they are just resources that are not being utilized efficiently, and the technology of sensors and real-time information can be used to improve that, in much the same way that programmers try to optimize the clock cycles of a microprocessor. To take one example, Levchin said:

“How about dynamic pricing for brain cycles? We have been maximizing utilization of very high-value, very low-frequency specialists — today you can already rent the brain of a data-mining genius via Kaggle by the hour, tomorrow by brain-hour. Just like the SETI@Home screensaver “steals” CPU cycles to sift through cosmic radio noise for alien voices, your brain plug firmware will earn you a little extra cash while you sleep, by being remotely programmed to solve hard problems.”

More efficient for users, or just creepy?

If you are a geek, this might sound like something with a lot of potential, but Carr describes it as “Clay Shirky’s ‘cognitive surplus’ idea taken to its logical, fascistic extreme.” Levchin goes on to paint a picture of a future in which his insurance company learns — via sensors in his car — that he is taking his children to work, and boosts his insurance premium by a few dollars for the extra risk (Note: we’ll be talking more about the potential of big data at our Structure:Data conference in New York).

Levchin no doubt sees this as efficient, but Carr sees the looming shadow of Big Brother: What if those same sensors detected that you were overweight, or had eaten too much pizza, he asks — would they report that to your insurance company? Maybe the company would boost your rates a little, or maybe you would be “scheduled for a brief re-education session down at the local office of the Bureau for Internal Resource Optimization.” As he puts it:

“This is the nightmare world of Big Data, where the moment-by-moment behavior of human beings — analog resources — is tracked by sensors and engineered by central authorities to create optimal statistical outcomes. We might dismiss it as a warped science fiction fantasy if it weren’t also the utopian dream of the Max Levchins of the world. They have lots of money and they smell even more.”

In a recent piece for Slate, Carr’s fellow digital skeptic Evgeny Morozov looked at the potential implications of banks and other credit-issuing agencies using Big Data to determine who deserves a loan. Although he says the idea of big data is “mostly big hype,” Morozov talks about several companies that are trying to use data from all kinds of sources — including social networks such as Facebook and Twitter — to figure out who is credit-worthy.

Hong Kong-based Lenddo and U.S.-based LendUp look at an applicant’s connections on Facebook and Twitter, Morozov says, and “the key to getting a successful loan is having a handful of highly trusted individuals in your social networks.” A British payday-loan company called Wonga even considers the time of day and how a user clicks around a website in order to determine whether they deserve a loan (although Morozov doesn’t mention it, PayPal uses similar methods to gauge credit-worthiness).

The key is who controls the use of the information

Morozov also mentions ZestFinance, founded by former Google chief information officer Doug Merrill (who we had at our Structure: Data conference in New York last year), whose company looks at more than 70,000 signals and 10 different models to assess credit risk. And he draws a direct link between this and Big Brother, saying: “If only East Germany’s Stasi — the true pioneers of “big data” — had the same model for assessing potential dissidents!”

Despite that comment, however, in the end he (somewhat surprisingly) seems concerned mostly that these companies will use all this information to market things to people who don’t need them, rather than turning them in to the government or their insurance company:

“What happens once these firms, having figured out that all data are credit data, realize that all data are also marketing data? Given how much they know about their clients, it would be very hard for such lending companies not to use this information to sell their existing customers on yet another loan or, perhaps, encourage them to use the loan to take advantage of some unique online sales offer.”

The common thread in both of these dystopian visions is a world in which our data is transmitted without our knowledge, and/or used against us in some way. Where Levchin seems to see an efficient exchange of data between user and service, one with benefits for both — and presumably a level (and secure) playing field in terms of who has access to it — Carr and Morozov see companies and governments misusing this data for their own nefarious purposes, while we remain powerless.

What makes it difficult to argue with either one is that we’ve already seen the building blocks of this potential future emerge, whether it’s Facebook playing fast and loose with the privacy settings of a billion people, or companies aggregating information and creating profiles of us and our activities and desires. What happens when the sensor-filled future that Levchin imagines becomes a reality? Who will be in control of all that information?

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We’ve argued before, The Atlantic is one of the traditional media players that is most worth paying attention to when it comes to the ongoing disruptive effects of the web — the venerable magazine has managed to turn itself around financially because of smart moves on the digital side, although those haven’t come without some mis-steps. Now Conde Nast’s New Yorker seems to be headed in the same direction, according to comments made by online editor Nick Thompson to Ad Week, including an expansion of its online presence driven in part by a former BuzzFeed staffer.

Thompson said he wants to “dramatically expand” the number of blog posts that the site carries with the upcoming launch of a Science and Tech section, which will feature contributions from magazine regulars like Columbia law professor Tim Wu and author Ken Auletta as well as new writers. One of those new writers is former BuzzFeed staffer Matt Buchanan, who announced his move to the magazine on Wednesday:

Thanks everyone! I’m going to miss @buzzfeedben and @jwherrman BUZZFEED a lot, but I’m preeeetttty excited to be going to the New Yorker.

—
matt buchanan (@mattbuchanan) January 30, 2013

Until now, The Atlantic has been the poster child for the brainy traditional magazine that has succeeded at the new digital-media game. Owner David Bradley and president Justin Smith gambled heavily on an online strategy — one that included hiring strong writers like Alexis Madrigal and Ta-Nehisi Coates, among others, and online-first properties like Atlantic Cities.

These and other moves have driven large amounts of traffic, and also boosted digital revenues to the point where they now exceed print (Note: We’re going to be talking with Justin Smith about these and other topics at our paidContent Live media conference in New York on April 17).

The magazine has also put a substantial amount of resources into the new arena of “sponsored content” as a replacement for traditional advertising, although that has not come without controversy: a recent sponsored feature on the Church of Scientology drew a substantial amount of criticism, and the magazine said it has re-evaluated the way it handles such content as a result.

The Atlantic‘s moves have made others such as Time Inc. (which is facing some major cutbacks) look like they are stuck in neutral. Only Forbes has arguably equalled the Atlantic‘s progress, with initiatives like its “Brand Voice” platform (chief product officer Lewis D’Vorkin will also be joining us at paidContent Live). Now it seems that both could be facing some competition from the New Yorker, which is encouraging to see.

Image courtesy of Flickr user Rebecca Chatfield

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In many ways, conservative blogger Andrew Sullivan and alternative musician Amanda Palmer couldn’t be more different: the former writes about the Obama administration and the intricacies of U.S. foreign policy, while the latter is the former lead singer of a punk band called The Dresden Dolls and sports hand-painted eyebrows, among other things. Their approach to their respective businesses, however — in both cases a very personal form of publishing — are similar in one crucial way: they succeed or fail based on how well they connect with and serve their fans. Is this the future of media?

Just a few weeks ago, Sullivan announced that he was severing his relationship with The Daily Beast and launching a standalone website, and asked for reader support in the form of a $19.99-per-year subscription. In just a matter of days, Sullivan managed to raise more than $300,000 and said recently that he has a total of almost $500,000 now — and that more than half of those who contributed to his campaign paid more than they had to (one anonymous subscriber contributed $10,000).

Fans don’t want content, they want a relationship

When I read this, the first thing that came to mind was the “pay what you want” music experiments of bands like Radiohead and Girl Talk, both of whom asked their fans to pay for songs that they could have easily downloaded for free, and got millions of dollars in response. Why did fans do this? Because they wanted to support those artists, not because they wanted music for free — just as readers who want to support Sullivan probably don’t care that they can get the content free via an RSS reader (Note: Sullivan will be discussing his new approach at our paidContent Live conference on April 17 in New York).

The Kickstarter campaign that Amanda Palmer ran last year to raise funds for a new album and a national tour falls into the same category (as does comedian Louis CK’s method of going direct to his fans to sell a concert tour): after quitting a deal with a traditional record label, Palmer initially wanted to raise $100,000 to fund her recording. Instead, she collected 10 times that amount, or more than $1 million. And the reason why her fans wanted to donate all of that money has very little to do with their desire to get an album, or even to see her perform.

Part of what Palmer has done — in addition to detailing what she is doing with all of the money raised — is to turn what could have been a regular tour into a series of personal events. Some of those who contributed got invitations to private shows, in which Palmer would not only invite attendees to come on stage and play (something that caused some controversy because she asked for volunteers instead of paying people) and otherwise interact with her.

As she describes in a recent interview with Billboard magazine, the rise of the social web has made it much more feasible for an artist to reach out directly to his or her fans — and many of those fans are going to be willing to contribute something, regardless of whether they get a direct return or not (a theory that former Wired magazine editor Kevin Kelly has called “1,000 True Fans”). As Palmer puts it:

“I see everybody arguing about what the value of music should be instead of what I think the bigger conversation is — which is that music has value, it’s subjective and we’re moving to a new era where the audience is taking more responsibility for supporting artists at whatever level. My theory is that things aren’t going to pick up until people … instead of saying people should want to pay for music, I think people should want to help their artists. I really think it’s a different way of thinking.”

Connect with fans and give them a reason to contribute

Getting up-close and personal with an artist like Palmer (who at some shows allows her fans to paint her body with washable paint) may or may not be your thing, but there’s no question that it inspires devotion in a fan base. And while Andrew Sullivan doesn’t go as far as Palmer, he is obsessively interested in what his readers want and how they are reacting to what he writes. As he described in his “declaration of independence” post, one of the reasons he decided to look at reader subscriptions instead of advertising was that he wanted to deepen his relationship with his readers.

“For the first time in human history, a writer – or group of writers and editors – can instantly reach readers – even hundreds of thousands of readers across the planet – with no intermediary at all. And they can reach back. We want to create a place where readers – and readers alone – sustain the site. No bigger media companies will be subsidizing us; no venture capital will be sought to cushion our transition (unless my savings count as venture capital); and, most critically, no advertising will be getting in the way.”

One of the most common responses to both Palmer and Sullivan is that very few people can get away with making a living from their fans or readers — in other words, that the two are the “one percent” of artists or creators who can do this. But whether it’s one percent or 5 percent or more, the fact remains that the tools that allow Palmer or Sullivan to do this are more readily available than ever, thanks to platforms like Kickstarter and the TinyPass paywall system Sullivan is using — or 29th Street Publishing, which allows writers to create their own mini-magazines.

Will this allow every writer to do what Sullivan is doing, or every artist to do what Palmer is doing? No. But their example (and others such as Jonathan Coulton) show that as Mike Masnick of Techdirt puts it, when an artist connects with their fans and gives them a reason to buy or contribute, they will almost always do so. All that’s required is that you have something valuable to offer — and that you are as fanatical about your devotion to those fans as Palmer and Sullivan and Louis CK are.

Post and thumbnail images courtesy of Flickr users Christian Scholz and Andres Rodriguez

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Funded in part by the Knight Foundation for Journalism, the Washington Post has just launched a new project called “Truth Teller,” which is designed to fact-check political speeches and comments in real time. It’s an ambitious effort that is based on an idea the Post‘s political editor had in 2011, and makes use of speech-to-text technology and a number of other tools. But the project raises a number of thorny questions, including: Is it even possible to fact-check the most egregious types of political disinformation? And if Truth Teller does manage to do this, will anyone care?

The funding for the venture comes from the Knight Prototype Fund, a relatively new effort from the foundation that is designed to help jump-start new ideas and startups — it invests via grants of up to $50,000 and says that the program is intended to help entrepreneurs “build fast [and] fail fast” while they try to reinvent the way that journalism works online.

The Washington Post‘s political editor, Steven Ginsberg, got the idea for a real-time fact-checking service while he was watching a speech given by former Republican presidential candidate Michele Bachmann in 2011. During her talk at a sports bar in Iowa, the candidate repeatedly misled her audience and Ginsberg said he envisioned a mobile app that would have allowed anyone to check whether she was telling the truth as she was speaking, and then challenge her statements.

Truth Teller checks facts against a Post database

The beta prototype that the Post launched on Tuesday isn’t quite there yet — it is only capable of checking facts related to taxation law and proposed changes to those laws, information that has been hand-fed to the system. But eventually, the newspaper says that the application should be able to do this about a wide range of topics by checking the Post‘s database in real time.

The Post‘s executive producer for digital news, Cory Haik, explains that the application turns speech from a video into text and then checks statements from that text version with an algorithm (a modified Rabin-Karp using Levenshtein distance). While watching a video of House Speaker John Boehner, for example, when he says that raising the top tax rate would “kill 700,000 jobs,” the application pops up a large warning in red, saying: “False.”

Below the video, there is a transcript of the speech, and users can click on any sentence and go to that section of the video — and they can also “view source” and see the basis for the newspaper’s claim that something is false. In the case of the Speaker of the House’s claim, it’s a piece from Glenn Kesler, who writes a column called The Fact Checker, and wrote a post specifically addressing Boehner’s statement — and ultimately awarded it three Pinocchios, which are the newspaper’s version of a thumbs down on the facts.

Political truth can be a slippery thing

The topic of fact-checking political statements became the focus of much debate during the run-up to the election, especially after the former public editor for the New York Times wrote a post asking whether the newspaper’s reporters should be “truth vigilantes” — in other words, whether they should challenge politicians on their statements during the campaign, or just report what they said and fact-check them later. The reaction from readers was astonishment that the newspaper wouldn’t want to do the former, but Brisbane argued that fact-checking is often harder than it seems.

This is one of the potential flaws with an approach like the Post is taking with Truth Teller: such automated systems likely work best when they have specific facts to drawn on, such as Boehner’s claim about 700,000 jobs being lost. But in many cases, the mis-statements that politicians make are much more vague and subject to interpretation than that, and so would be difficult to check against a database of facts.

The other problem is that even Ginsberg’s example of the Bachmann speech assumes that any of those listening would have wanted to fact-check her comments in real time. In the same way, the Truth Teller system — and other similar efforts such as the “Truth Goggles” project, or even more established fact-checking services like Politifact — assume that anyone will take the time to actually go there and check the facts. But will they?

Post and thumbnail images courtesy of Shutterstock / Donskarpo