July 2006 Archives

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Wednesday, July 26, 2006

Oliver Stone's self-interested charity

We all know about the cult of the opening weekend: film producers will do almost anything to maximise their opening weekend gross. In the case of the the new Oliver Stone film, World Trade Center, that includes standard tactics like opening very wide – on over 2,000 screens nationwide. But they've added an interesting twist: according to a press release today (PDF), WTC

charities will receive 10 percent of all “World Trade Center” ticket sales in every theater across the United States for the film’s opening five days, from Wednesday, August 9, 2006 through Sunday, August 13, 2006.

Got that? If you want any of your $10.25 to go to a WTC-related charity, then you'd better go during the opening weekend. After that, the price of the ticket just goes back to the filmmakers as usual.

I think it's great that some of the proceeds from World Trade Center ticket sales is going to WTC charities, of course. I just find the way they're doing it to be a little too cynical for my taste.

Posted by Felix at 14:43 EST | Comments (0)

Stephen Dubner is hard done by

Stephen Dubner, co-author of the global bestseller Freakonomics and resident of the Upper West Side of Manhattan, is not happy with his lot. Turns out he's part of that small minority of Manhattanites who owns a car, and he feels that not enough is being done to make his car-owning life easier. What would he like to change? He would like to be able to buy a parking spot. He would like some form of residents' parking on the UWS so that he can park there for free while other people can't, increasing his chances of finding a spot. And he would like to be able to park in front of fire hydrants.

Weirdly, I feel no pity for Dubner's sorry state whatsoever. For one thing, the commenters on his site have done a very good job explaining why people shouldn't park in front of fire hydrants. Says Dubner, with his habitual overconfidence that anything he thinks must, therefore, be true: "The firemen only need to hook the hose up to the hydrant, and a car parked by the hydrant certainly doesn’t interfere with that." I think that "certainly" maybe doesn't mean what Dubner seems to think it means, as this photo clearly demonstrates. Fire hoses need to go straight into the hydrant, and if a car is parked in front of the hydrant, that basically means they have to go straight through the car.

As for buying parking spaces, Dubner hilariously says that he has "long wondered why some entrepreneur hasn’t turned a NYC parking garage into a co-op". Yes, that's right, a co-op. Because of course we couldn't have just anybody buying a parking space: they would have to go through the co-op board first. Can't have some crappy old Ford truck next to my Porsche Cayenne.

In any case, Dubner seems to have utterly missed the entire business model behind parking garages, which is that they quietly sit there, making a relatively modest amount of money with very little in the way of hassle or expense or property taxes, until such time as the owner decides to cash out to a property developer. So clearly you can't sell individual spaces in perpetuity, because then you would lose your exit strategy and your opportunity to make an enormous profit on the land.

Then, of course, there's free on-the-street parking, a system which abuses – abuses! – honest taxpaying millionaires like Mr Dubner:

NYC residents like me get abused by the current free-parking-on-the-street system. Why should someone who, say, lives in New Jersey and works on the Upper West Side get to park for free on my street when I pay local taxes and he doesn’t?

Is it maybe because public parking is for the, um, public, and not just for people who can afford to live on the Upper West Side? In any case, Manhattan's car owners get an incredible deal already. Every time they park their car on the street for free, they get exclusive use of roughly 160 square feet of prime Manhattan real estate for nothing. They can store all manner of stuff in their car(s) – storage space which would cost many thousands of dollars if you had to pay for it. And they get very easy access to transportation anywhere in the city, while the rest of us have to schlep to the subway or wait for a bus or try to find a taxi.

Think of a European city like Utrecht or Munich. There are many fewer cars parked on the street than you see in Manhattan, and instead the roads have wide and well-maintained bike paths. Now imagine all the space given over to free car parking in Manhattan used instead for bike paths and bike parking, remembering that you can easily have parking for a dozen bikes in one parking space.

Who would benefit from such a plan? Most New Yorkers, since biking around the city would stop being a very dangerous proposition and start being by far the easiest, fastest, and most efficient way of getting from A to B. Who would lose out? The relative handful of residents who also own cars. The cost-benefit analysis is clearly positive, but don't expect a "freakonomist" like Dubner to buy it (or, it would seem, New York City Transport Commissioner Iris Weinshall). After all, look at the pain Dubner's in already!

Posted by Felix at 13:13 EST | Comments (14)

Maps for people who don't drive

This is just a wonderful, wonderful story (via the excellent StreetsBlog). It turns out there's a cycling union in Holland (where else), which actually does really useful things instead of just screaming and shouting a lot. In this case, they put a wiki together to create a cycle route planner for the Utrecht area, including thousands of bicycle lanes which didn't appear on the GPS route-planning devices used by cars.

The volunteers needed to be much more precise than commercial digital map makers for car navigation devices, jotting down details such as road surface, scenery and if a road is well lit.
"Detail is what cyclists need and what makes this so valuable. You need to be able to choose a safe route at night, and a racing cyclist wants a hard bike lane and no dirt roads," said 34-year-old Erik Jonkman, one of 70 volunteers.

Because it's a wiki, errors get corrected quickly and easily. And of course it should scale very easily as well, at least within Holland. The whole thing sounds great.

The story also reminded me of something I've never understood about New York, a city where most people travel by subway. If you look at any street map of London, all the tube stations are very clearly marked. But if you look at any street map of New York, except for the subway map itself, which isn't much of a street map, there are never any subway stations on it. So if you're looking at a certain address, you have to have the whole subway system essentially memorized – or else have a copy of the subway map to hand – in order to work out how to get there.

This is particularly, and annoyingly, true of online maps from the likes of Mapquest or Google. Many stores and venues in New York helpfully link their addresses to an online map page which shows where they are in the city – but you can never see, from that map, where the nearest subway stations are. Indeed, I'm not even sure that there is any online resource where you can just type in an address and get back a list of the nearest subway stations. Even Hopstop, which presumably could offer the service very easily, doesn't.

Posted by Felix at 11:58 EST | Comments (6)

Sunday, July 23, 2006

Summit Communications and AFA Press

There's been some very interesting activity this month in the comments thread on an old post of mine about Summit Communications. Since I don't expect anybody to plough through more than 12,000 words of comments, I thought I'd summarise the discussion here.

And it really is a discussion: people pretty much are who they say they are. I've got a list of their names and IP addresses after the jump if you don't believe me. The only time an IP address is repeated is when Marcos Melo, who is an employee of Alvaro Llaryora, posts from the same IP address as Llaryora. Which makes perfect sense.

Nearly all of the activity comes from employees or former employees of Summit Communications or its sister companies. I'm not sure how or why they all seem to have found my blog entry at the same time, but I assume there's been some emailing going on. In any case, the basic Summit Communications modus operandi definitely emerges from the discussion.

It turns out that Summit Communications is a vehicle set up by a parent company called AFA Press for the express purpose of selling advertising supplements in the New York Times. AFA has other, similar companies for other publications: the one for the Observer in the UK, for instance, is called Images, Words; the one for USA Today is called United World; the one for the Daily Telegraph in the UK is called PM Communications, and so on. The true center of operations for all these companies is Madrid, although they're mostly incorporated in the UK.

The owner of all these companies is an Argentine called Alberto Llaryora – the father of one of my commenters, Alvaro Llaryora. (In Argentine Spanish, both "ll" and "y" are pronounced as "zh", so think "zharzhora".)

Why does Llaryora have so many offshore companies, each with a very different name? (Apart from any money-laundering he may or may not be doing, of course.) The impression one gets from reading the comments is that it's very simple: the people working for these companies are so sleazy and unprofessional that the governments and companies in the countries buying the advertorials are unlikely to ever want to work with them a second time. So Llaryora simply sends a team from a company with a name untarnished in that country instead.

And there's another reason: the AFA sales team makes no effort whatsoever to distingish themselves from the publication that they're going to print the advertorial in. The fact that each subsidiary works only for a single publication allows them to say that they are "the exclusive partner of the New York Times" or somesuch.

In fact, the sales technique at AFA seems to depend on their pretending to be from the New York Times / USA Today / whoever. The AFA team always includes a "journalist" who goes around attempting to get interviews with senior officials and executives in the country, for a report on that country to be published in the newspaper in question. Obviously, the fact that the report will be an advertorial is not mentioned, and neither is the fact that the "journalist" not an employee of, let alone a journalist for, the newspaper.

Similarly, when the advertorial is being sold, it is always sold on the basis that the number of readers of the advertorial is the same as the number of readers of the newspaper in question. Most advertisers who want a bound-out supplement in the Sunday New York Times, say, are well aware that the vast majority of readers will simply throw that supplement away unread. But AFA sales people present themselves as selling advertising (little display units within the advertorials) against New York Times / USA Today editorial with its enormous circulation and readership numbers.

AFA seems to specialize in employing young, hungry sales people with no previous experience in the media business. One of them phoned me after being given a job offer, wanting to find out what I knew about the company; another left a comment on my blog. The person I talked to had only sales experience well outside the media industry, but was being offered a job as a "journalist": writing skills, of course, were unimportant, as the only thing that matters is making sales. These kids can make a lot of money by lying to advertisers, and no one ever discourages them from doing so – quite the opposite. They justify their actions by saying that they're working in corrupt countries, and that if you want to make money in such countries you have to be part of that corrupt system.

Generally, it would seem, the male "journalist" will go through the motions of interviewing the minister/executive in question; at the end of the interview, a very pretty female "director" will then approach the interviewee to buy some advertising against the interview. (Of course, if the advertising isn't bought, then the interview won't appear, but that's never mentioned.) In the case of government ministers, the "director" will ask the minister for a letter giving his "support" to the publication, and encouraging the companies in that country to cooperate with the reporter. The minister thinks he's simply opening doors for the "reporter" to be able to do his interviews, but of course the "director" helpfully explains to the executives that in order to cooperate as the minister wants them to do, they will have to buy advertising.

The technique works so well that former AFA employees have gone on to set up their own companies doing exactly the same thing: see Vega Media, Impact Media, and Media Plus, which seems to have an especially low reputation. There's a whole sector of these companies, it turns out: Global Press, for instance, run by Alberto Llaryora's brother Rodolfo Llaryora, would seem to have the Washington Post and Fortune Magazine locked up. There certainly seems to be de facto exclusivity: only one company ever seems to produce advertorials for any given publication. Does Summit Communications pay the New York Times extra for being its only advertorial provider? How else can one explain the seeming absence of any competition in the NYT?

I'm sure that the New York Times, alongside all the other highly-regarded publications in bed with AFA Press, spends as little time as possible asking about the genesis of the advertorials which it prints. Just as the millions of people who eat at McDonald's really don't want to know the details of how their meal is made. This is the real difference between these publications, on the one hand, and Euromoney, on the other: Euromoney, when it sells supplements, does so under its own name, and in the knowledge that if the client is unhappy he'll never buy another one. The NYT et al don't sell supplements, they leave that to others, who are happier to burn their clients because they'll likely never return to that country anyway.

I'd be very interested to learn whether New York Times journalists working in third-world countries ever find themselves battling ministers or executives who think they've dealt with the New York Times in the past, and who have very bad memories of the whole encounter. Maybe every time they do, they should complain to the advertising department about the stuff which is being done in the NYT's name. That, in turn, might drive AFA Press and its subsidiaries to higher standards of conduct.

More likely, an increase in the media-savvyness of third world ministers and executives will force Llaryora and his employees to be more transparent; from reading the comments on my original post, that might be happening already. Instead of misleadingly selling an ad against an interview in the New York Times – something which anybody who knows the NYT knows can never be done – AFA might start talking more about the usefulness of newspaper supplements in terms of turning around the image of a tarnished country. Chances are, of course, that if the people buying into these supplements knew how effective they really were, they would never take part. But at least some of the sleaziness in the industry would be minimised.

Commenters and IP addresses after the jump.

Continue reading "Summit Communications and AFA Press"

Posted by Felix at 15:25 EST | Comments (102)

Friday, July 21, 2006

Blodget on Vonage

Vonage has had a torrid few weeks since it went public in May at $17 per share: the stock closed today at just $6.84. And who better to weigh in on this state of affairs than our old friend Henry Blodget? I've just found a posting of his from July 6, when the stock had fallen to $8.25, and two of the IPO's underwriters had just put out negative research on the company.

Blodget, of course, knows what it's like to be a tech-stock analyst: he was one. And he knows what it's like to be pressured into writing positive reports on companies that your bank does business with: because he did that, he had to pay a whopping great fine, and is now barred from the securities industry. So one would think that Blodget would welcome this brave new world where analysts can turn around a month after the IPO and say without fear of being fired that they think the stock stinks.

But, of course, one would be wrong. Blodget doesn't think that at all. Instead, he thinks that the firms did their clients a disservice by not publishing the research earlier:

Let's look at this from the perspective of an IPO buyer. Wouldn't you have liked to have known that these analysts thought the stock wasn't worth $8.25 before you paid $17 for it? Or, if that was impossible, wouldn't you have liked to have been confident that the analyst had signed off on the deal before it was sold to you? Don't you feel a bit shafted that you were sold a stock at $17 that the only real expert at the firm thinks is not even worth $8.25?

With this kind of logical ability, it's no wonder Blodget could persuade himself that Amazon was worth $400 a share at the height of dotcom fever. Let's run through some of the assumptions here:

First, it seems that if you want an investment bank to value a company, "the only real expert at the firm" is going to be... wait for it... a stock analyst. Not a banker, who's actually charged with selling the company, but rather an analyst who's only interested in what direction the stock is going in. It turns out that in the World of Blodget, all the gazillionaire bankers working in equity capital markets or mergers and acquisitions are chumps, really, compared to their much poorer brethren poring over SEC filings and writing widely-ignored research reports.

It seems that Blodget still doesn't get it. Someone who's very good at valuing companies will not be wasted in equity research, and will become a banker quite quickly. Someone who's very good at arbitraging the difference between what a company is actually worth and what the market thinks it's worth will also not be wasted in equity research and will instead most likely join a hedge fund. The main skill of people in equity research is not to pinpoint the value of a company, but rather to come up with ideas or insights which the investment bank's clients can then use to come to their own decision as to whether a stock is worth buying or selling. The headline buy/sell recommendation is actually pretty irrelevant for the majority of the people who receive the research.

(I know, I described this view of equity analysts as "hopelessly out of date" four years ago, but I did say that things were swinging back in that direction, and in this particular case I think it's true.)

Second, what on earth makes Blodget think that these analysts did actually think the stock wasn't worth $8.25 before the IPO? Blodget, more than anybody, knows that buy/sell recommendations are based on where the analyst thinks the stock is going: before the IPO, there wasn't a month's worth of data showing the share price going steadily south. Blodget seems to be living in some kind of parallel universe where a stock analyst takes a company's books, works out a valuation, and only then compares his own valuation to that of the market. If his valuation is higher then he puts a "buy" rating on the stock, and if it's lower then he slaps on a "sell". But of course no stock analyst actually works like this: one thing that is still true from four years ago is that the reasons why one might want to buy a falling stock are often very different from the reasons why one might want to buy a rising stock.

Clearly, the market has looked at the valuation that Vonage's bankers put on the company when it went public, and decided that it doesn't make sense. Indeed, it's entirely possible that any non-zero valuation for Vonage doesn't make sense, given that the company might well never make a profit. In any case, the direction that the stock is headed in is unambiguous, and I daresay that there are precious few companies which lost half their market capitalization in the first month of trading, and then proceeded to turn around and bounce healthily back. In other words, even if you thought that Vonage was worth, say, $25 per share, you'd think twice before putting on a "buy" recommendation after the stock had sunk from $17 to $8.25 in the course of its first month trading.

Which is to say that having a stock analyst "sign off on the deal" before it's priced is extremely silly. What would that entail, anyway? Giving the stock analyst veto power over whether the company can be brought to market at any given price? Surely the market should be the main arbiter of the price, not one analyst. I really can't imagine what Blodget has in mind here. Presumably he means some kind of statement from the analyst that the IPO price is not unreasonable – but asking an analyst to provide such a statement puts him in an impossible situation. How could he say no?

Posted by Felix at 19:24 EST | Comments (1)

Dana Stevens, frustrated filmmaker

Dana Stevens is Slate's new film critic – this is a good thing, since Slate's last film critic, David Edelstein, was dreadful. But can you see a pattern emerging from her last three reviews?

You, Me and Dupree: "A fantasy sequence, in which Carl imagines Dupree sailing on his father-in-law's yacht while his wife performs a striptease, points toward the movie this might have been..."

Lady in the Water: "The closed universe of the Cove complex (the camera never ventures outside the building's walls) could have been a great setting for a Rear Window-like investigation of neighborliness gone awry. Instead..."

My Super Ex-Girlfriend: "A less willfully misogynist movie might have made Thurman's double identity the starting place for an exploration of female power, super- or otherwise. What would you do if your girlfriend not only made more money than you, but knew how to stop an incoming missile with her bare hands? Instead..."

Posted by Felix at 17:44 EST | Comments (0)

Wednesday, July 19, 2006

Tom, Unwanted

My local branch of the New York Public Library is coming to the end of its Summer Book Sale, where books which are surplus to requirements are sold off for 50 cents (paperbacks) or $1 (hardbacks). There's not much left on the sale table, maybe a dozen books, but among them, unwanted even at one measly buck: I Am Charlotte Simmons. I am so proud of my fellow Lower East Siders.

Posted by Felix at 14:50 EST | Comments (1)

Tuesday, July 18, 2006

Five to one

Thank You For Smoking: 5/5. Witty, smart, hilarious. See it.
Pierre Huyghe at the Tate: 4/5. Witty, smart, gorgeous. See it. (And I'm not even a Pierre Huyghe fan.)
The Rem Koolhaas pavilion at the Serpentine: 3/5. Smart, gorgeous, pointless. Worth seeing.
740 Park: 2/5. Pointless, overlong, boring. Avoid.
The Matador: 1/5. Pointless, boring, forgettable. Avoid.

Posted by Felix at 16:52 EST | Comments (5)

Public transport in London and Germany

I was in Europe for the past three weeks, hence the light posting. I travelled around London and Germany, and although it won't surprise anyone to hear that the public transportation system in Germany is much better than it is in London, even I was surprised at how much better it was.

On the one hand are the weaknesses of the London system. London has a wonderful thing called the Oyster card, a must-have for any London resident or visitor. (NYC is presently trialling a weak imitation.) You use it to tap into and out of tube stations and buses, and it's more or less replaced the longstanding institution of the one-day travelcard. Rather than pay in advance for unlimited use of public transportation for the day, you simply rack up journeys on your prepaid card as normal; Oyster will stop charging you when your total for the day reaches 50p less than the price of a one-day travelcard.

The problem with the Oystercard is not with the card itself, which seems to work much better than anything else Transport for London runs. Rather, the problem goes back to that famously misguided Tory cockup, rail privatisation. You see, while most of London north of the river is well served by the London Underground, London south of the river relies instead on above-ground rail services. Where I grew up in Dulwich, for instance, it's easy to take a train into Victoria which takes less than 15 minutes, but there's no tube service at all. Conversely, Hampstead, which is the north London equivalent to Dulwich, is well served by the Northern Line, but doesn't have any above-ground trains.

As a result, the travelcard is designed to be platform-agnostic: whether you're taking the train to West Dulwich or the tube to Hampstead, the same card will do the job. But the train companies haven't really signed on to the program, which results in all manner of annoyances. Because of the no-need-to-buy-a-travelcard feature of the Oyster card, Oyster has actually made it impossible to put a one-day travelcard onto an Oyster card. But then you decide to visit somewhere south of the river, and you miss your train because the trains only accept Oyster cards with travelcards on them, not the prepaid Oyster cards that are perfectly good for travelling around the rest of the city. (It's possible to put a seven-day or one-month travelcard on an Oyster card, just not the one-day version.)

Now rail privatisation postdates the construction of the rail network, which is reasonably well integrated with the train network. But although the networks are physically integrated, they're now all run by different companies, which causes loads of completely unnecessary nightmares for travellers. For instance, flying back from Germany to London, I arrived at Stansted airport and was staying near Herne Hill station in south London. Stansted has a good train station, and so does Herne Hill. Could I, then, simply buy a ticket from the former to the latter? No, that would be far too easy. Arriving at Stansted, the ticket machines would only sell me tickets on the Stansted Express ("express" here meaning nothing beyond the fact that it's a train which travels from a London terminus to a London airport, and is very expensive.) The first ticket machine, in fact, sat on my card for ages before failing to disgorge any tickets; the second gave me my two tickets to Liverpool Street for £30.

At Liverpool Street, you can buy tickets from the train station or tickets from the tube station. We needed to take the tube, so we used our Oyster cards to go three stops to Farringdon. Now at Farringdon, the tube platform where we got off is right next to the train platform from which we were taking a train to Herne Hill. Convenient, no? But there are two problems. Firstly, you need to "tap out" with your Oyster card when you finish your journey, so that the card knows whether to bill you for a little three-stop Central London trip or for a long journey well out into the suburbs. And there's no Oyster station between the tube and train platforms at Farringdon, which means you can't "tap out" there. There's also no ticket machine on the train platform, so in any case there was no way of buying our ticket to Herne Hill. And we couldn't simply "tap out" at Herne Hill, because it's not on the Oyster pay-as-you-go system. So I had to take two oyster cards up to the Farringdon exit, tap them both out, buy two train tickets with cash at the ticket machine, and then return to the platform. If I were a tourist, the chances of my being able to work this out would have been exactly zero.

Of course, had I been stupid enough to fly back to London on a Sunday afternoon, maybe in order to be able to go to work on Monday morning, I would have been out of luck, since the last train from Farringdon to Herne Hill on a Sunday is at 16:40. (The first train from Herne Hill to Farringdon on a Sunday, incidentally, is at 10:42, arriving 11:02. Clearly no one travels on a Sunday before 10:30 in the morning or after 4:30 in the afternoon.) Actually, if I had been stupid enough to travel anywhere in London on a Sunday afternoon, I would have been out of luck. Last Sunday I was at a barbecue in Highgate; even with a lift from a friend in her car, it took us an hour and a half to get back to Herne Hill. Nothing seemed to be working: the trains were all delayed (natch), the tube station we wanted to use was closed for the next few months (the second time in two days we'd run into that problem, firstly with Regents Park and then with Lancaster Gate), the Victoria Line was dodgy all month, and seemed to be completely closed on the Sunday north of Highbury and Islington, the whole northeastern branch of the Northern Line was out of order, and of course ~~Thameslink~~ First Capital Connect wasn't working, it being a Sunday afternoon at all. In a nutshell, any kind of north-south transportation, be it the Northern Line, the Victoria Line, or the train, was buggered. It's like the people in charge of such things never talk to each other to coordinate things. Actually, they probably don't.

Meanwhile, getting around in Germany was almost comically easy. The trains were all bang on time, fast, and clean. At somewhere like Berlin's gleaming new Hauptbahnhof, the platforms for the inter-city trains sit happily side by side with the platforms for the Berlin S-Bahn. The ticket machines were intuitive, easy to use, and would do friendly things like print out your itinerary for you, complete with which platform to change to. When three of us travelled from Berlin to Oebisfelde, we didn't get a small pile of individual tickets for various different trains: instead, we just got one ticket for the whole journey, covering all three of us.

Best of all, in Munich (which I think might well be the most civilised city in the world), Deutsche Bahn actually runs not only trains but bicycles. DB bikes are all over town, and when you want to go somewhere you just call the number on the bike, get a code to unlock it, get on it, and ride away for 5 cents a minute on the extensive system of bike paths which sit between the pedestrian sidewalk and the roadway on most Munich streets. When you get to your destination, you lock the bike, call the number, leave a message saying where the bike is, and leave the bike for the next person who needs it. It's like Zipcar, but for bicycles, and capable of being used much more impulsively. It's genius, but I fear it requires a level of civilisation a notch or two above anything that New York or London is capable of.

Posted by Felix at 15:45 EST | Comments (11)

That Girl Emily

So here's the idea: Emily is an underemployed realtor in New Jersey, married and about to have kids with her financial consultant husband, Steven. She then finds out that Steven is having an affair with her best friend Laura. Coincidentally, she started a blog just a couple of weeks before she found out about the affair. So if you read the July archives from the bottom up, you get the whole story.

Oh, and did I mention that as part of her scheme to get back at her husband, Emily has bought an enormous billboard above Mercury Lounge on Houston Street? The photos on the blog are genuine, even if both the blog and the billboard seem to have far too little personality and far too much professionalism to be real. The blog, especially, is structured far too much like a bad novel, with the "before Emily finds out" posts setting us up far too neatly for the "after Emily finds out" posts.

And if Steven is really a financial consultant for a big firm, how likely is it that his office is in the Lower East Side?

My guess is that the whole thing is would-be viral marketing for a new book or film. But just not done very well. If you're going to set up a fake blog, keep it going for more than a couple of weeks before you drop the bomb.

UPDATE: Gawker had it yesterday, when I was still on holiday, and apparently the billboard is up in LA as well. Now that's what I call a long commute from New Jersey!

Posted by Felix at 9:42 EST | Comments (5)

Tuesday, July 04, 2006

The New Gawker

On his own site, Nick Denton calls it "battening down", against rising costs and an entirely hypothetical downswing in entertainment-industry advertising expenditure. In the New York Times, Denton goes a bit further: "We are becoming a lot more like a traditional media company," he tells David Carr in an article which somehow manages to portray one of New York's most professional and assiduous networkers – Denton really does know everyone – as "the antithesis of the schmoozer". (It almost feels churlish to point out that Denton made his first fortune by setting up a company whose raison d'être was to monetize schmooze.)

In any case, Gawker Media would seem to be downsizing: something Denton is presenting as a "countercyclical move". In reality, however, I'm not sure that Gawker Media is going to be significantly smaller after the events of this weekend. Five bloggers are leaving: Ken Layne and Scott Ross at Sploid, Dong Resin at Screenhead, John Biggs at Gizmodo, and Jesse Oxfeld at Gawker. Three bloggers are arriving Joshua David Stein at Gridskipper, Alex Balk at Gawker, and Brian Lam at Gizmodo. Gridskipper's Chris Mohney is getting elevated to a new managing editor spot at Gawker. So maybe payroll will have fallen a tiny bit, but certainly not by much. And given the salary expectations of the likes of Balk and former Condé Nast-y Lam, it might even have gone up. (Denton: "For editorial talent, we now pay within the range of mainstream media.")

The big news here, at least as far as the blogosphere is concerned, is the defenestration of Oxfeld. Jossip headlined it as "Denton Wants Mainstream Appeal," and Oxfeld seemed to concur: "it’s all basically true; whatever direction the site takes in the future, I won’t be along for the ride." I don't know Oxfeld personally, but he seems well-liked within the blogging community, and I suspect he was well-liked within Gawker Media as well. But Nick Denton is no sentimentalist, and my guess is that he saw Oxfeld as appealing only to a narrow slice of New York media insiders, and therefore being unable to deliver the traffic growth that he wants for all his sites.

Indeed, Denton might well have noticed, at his numerous parties and lunches, that New York media types read Gawker much less now than they used to in the days of Choire Sicha. That's probably not because Oxfeld serves them less well than Choire did, but rather it's more a function of the large amount of non-media content on Gawker these days. It's true that when sites post more often, their readership rises. On the other hand, it's also true that the New York media elite doesn't really have the time to wade through vast amounts of general-interest celebrity gossip in order to find the occasional media-related tidbit. So as Gawker has grown and mainstreamed, its "influence, buzz, and significance", to quote Lockhart Steele, has declined.

The man charged with squaring that circle is Alex Balk. Alex is one of the few people in New York who knows even more journalists than Denton, and his vicious wit should be able to merge well with Jessica Coen's, and appeal to a nationwide audience. I'll be interested to find out whether he's forced into the Gawker house style, however, or whether he'll be able to keep, at least sometimes, his trademark deadpan headline-is-the-punchline technique, as originated, I believe, with Esquire's Dubious Achievement Awards.

If Balk is the man who Denton has hired to bring the buzz back to Gawker, then Chris Mohney, I'd guess, will have more of a managerial role. This is Gawker growing up, and Denton giving up on his original vision of running "sites covering categories too small to warrant dedicated print publications, but with an appeal to advertisers sufficient to support a bare-bones editorial operation". Gawker now has an org chart with just as many layers as quite a few magazines I can think of: interns, editors, a managing editor, and editorial director, and, of course, at the top, Denton himself.

Will Balk scoff, in his initial posts, at the "managing editor" role? (Managing Editor means very different things at different publications, and in fact can be either higher or lower than Editor: the only thing that's constant is that no one ever knows exactly what it means.) I can't imagine that he or Coen will pay much in the way of deference to Mohney.

But bossing around Balk and Coen is not Mohney's job, in my estimation – and sunning myself as I am in England, I'm not really inclined to find out. I assume that Mohney is being hired largely for his managerial prowess – that he demonstrated an ability to herd far-flung copywriters while at Gridskipper, and that his new job will in large part be managing Gawker's ever-growing army of interns and freelancers. (Nearly all Gawker's regular features are outsourced, and not actually written by its editors.) Mohney, as I see it, will have been charged with goosing Gawker's traffic and turning it into a gossip franchise which can rival the combined might of Page Six and Keith Kelly – leaving Jessica and Alex to bring the funny and the attitude and the snark.

The way I see it, then, the New Gawker is split into three parts. Alex will revitalize it among New York media types; Jessica will continue to write about more general-interest gossip and maybe give Gawker an increasing amount of exposure on TV; and Chris will be in charge of the regular features, including the skeevy Gawker Stalker, giving the website the sheer volume of posts which seems to be necessary, these days, for large amounts of traffic.

Denton is moving in this direction largely, I would guess, as a result of his advertisers. His initial dream of charging premium rates for premium readers never even began to take off, and, to his credit, he was the first blog entrepeneur to realise that the quality of a blog's readership was much less important than its size. (Jason Calacanis came to the same conclusion much later than Denton: he was still launching B2B blogs even as Denton was launching blogs devoted to sex and Hollywood.) Denton pays his bloggers according to the readership growth they deliver – and if that growth isn't forthcoming (cf Oddjack, Sploid, Screenhead) then not only the bloggers but even the blogs themselves will go.

Two years ago, I gave Denton grief for saying that Gawker's readership was made up of "media junkies". Today, he'd no longer make that claim (and I'm sure he'll correct me if I'm wrong here). Media junkies are still important to Gawker, just as they're important to the New York Post. But Gawker's ambition is to become much bigger than that, which means having to grow out its Condé-obsessed roots.

I'm sure that Denton is attempting to recapture some of the buzz that surrounded Gawker in the early days. But that buzz has left not only the Gawker Media building but indeed the entire blogosphere, and is presently to be found in the neighborhood of Digg and MySpace. Whether it will ever return I have no idea, but in the meantime Denton's going to concentrate on growing traffic and making money.

The big question, of course, is what Denton's ultimate goal is. I've speculated in the past that he'd like to be the first blog company to go public, and this latest move would be consistent with that. I'm sure that Gaby Derbyshire and Lockhart Steele might like, at some point, to be able to monetize their equity. But Gawker Media doesn't need equity capital to grow, and Denton certainly doesn't need the cash. So for the time being, Gawker Media will become bigger and more profitable and more Old Media-like. What Denton will ultimately do with his baby is probably unknown even to him.

Posted by Felix at 7:52 EST | Comments (2)

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