Tuesday, July 19, 2011
3874271
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Tuesday, July 12, 2011
foreclosure agents
I’ll be brief because this article from the Michigan Messenger (hat tip furzy mouse) stands on its own. Readers may recall that some registers of deeds (the county officials responsible for recording mortgage transfers) are less than happy at the way MERS has deprived their governments of income by skipping recording fees for some mortgage transfers (that was the point, after all) and making a mess of title records.
Two counties in MIchigan, Oakland and Ingham, have decided to do something about it. To my knowledge, this is the first litigation of this type:
Oakland County Treasurer Andy Meisner is suing mortgage giants Freddie Mac and Fannie Mae in the nation’s first federal lawsuit seeking to recoup tax payments never paid on properties that were transferred several times during the height of and during the foreclosure crisis that has gripped the nation over the last few years,
“I do think it’s fraudulent and I do think there is strong evidence to suggest there has been fraud. I do think it is a fraudulent conspiracy,” Meisner said. “We are identfying the people involved and we are systematically working to hold them accountable.”
While Ingham County Register of Deeds Curtis Hertel Jr. would not go so far as to allege a “fraudulent conspiracy” he says that the aim of his lawsuit is to find out just how deep the malfeasance went.
“This is about getting to the truth,” Hertel said Wednesday, standing in front of one of the many foreclosed and empty houses in the city of Lansing. “I believe the crisis has been further exacerbated by a systematic attempt to avoid state transfer taxes in my office.”
Hertel’s lawsuit alleges that the defendants and their agents claimed tax exemptions they were not entitled to. Specifically, the defendants are alleged to have claimed an exemption which prevents the federal government from having to pay the property title transfer company. The defendants claim that Freddie Mac and Fannie Mae are federal entities.
Meisner’s lawsuit alleges the same claim against just Freddie Mac and Fannie Mae.
“Defendants have not paid the Transfer Tax because they have claimed on the face of the documents they have recorded that the transaction is exempt from the Transfer Tax. They sometimes claim the transaction is exempt because they are government entities and, under Michigan statute, government entities are exempt. Other times they claim they are exempt pursuant to federal statute.
“Neither claimed exemption applies. Defendants are federally chartered private corporations and not government entities. Defendants’ federal law exemption from certain taxes does not include the Transfer Tax.”
Both Freddie Mac and Fannie Mae are publicly traded companies, according to their websites.
The official transfer tax rate for counties in Michigan is $1.10 for every $1,000 of value being transferred. So the sale of a $100,000 home would typically carry a $1,100 tax. State taxes on the same transactions stretch even further – $7.50 for every $1,000 of value being transferred.
Those taxes add up, both officials said in interviews. Meisner says Oakland County has lost about $1.5 million from its general fund in the last six years, while those same cases in Oakland meant an estimated $10.5 million kept from the state. Hertel would not put an exact dollar figure on the potential losses caused by the alleged actions of the defendants, but said the county had lost “millions” while the state had lost “tens of millions” in tax revenues.
Update: Reader IF points out the computation in the article regarding the typical fee per transfer is wrong. If the $1.10 per $1000 is correct, the fee would be $110, which even then is on the high side of what I have heard recording fees often are (the question is whether the “transfer tax” is a different beast than a recording fee, and whether it might actually be $1.10 per $100, which would make the $1,100 charge correct). I look to Michiganders to provide input.
The latest report by Shahien Nasirpour at Huffington Post confirms two things you’ve heard here and on some other sites following this sorry affair: first, that Tom MIller, Iowa attorney general who is leading the 50 state attorneys general negotiations on mortgage abuses, is a liar, and second, that any settlement will be a whitewash.
Actually, we already knew Miller was a liar. Shortly after the effort was launched, Miller promised that “”We will put people in jail.” He then started walking that back. Not only did he tell Bloomberg that they were NOT pursuing criminal charges, but per an e-mail:
I was w/ a European documentary maker this weekend who spoke to Miller a few days ago and said Miller relayed the fraud isn’t so bad, everything will be worked out .. the standard line; he’s already made up his mind. He doesn’t want those European governments demanding their money back. The meeting is a photo-op setup because the too-big-to-fail crowd is scared of put-back liability and shorts; they’re working hard to make it appear they’re doing something to quiet everybody down.
Note this message was sent BEFORE MIller made the “jail the baddies” promise that MIller recanted. And it indicates that this entire affair was intended to be an exercise in kabuki theater rather than anything remotely resembling a real investigation.
That brings us to MIller’s second lie. After a staffer ‘fessed up that no investigations were being undertaken, Miller maintained that extensive examinations were underway. That, as Nasiripour indicates, confirming earlier intelligence via Gretchen Morgenson, is complete crap (emphasis ours):
According to sources familiar with the ongoing state and federal probes, state and federal officials have wasted months not digging into the details of the foreclosure crisis, yielding little of value in court and undercutting the lenders’ incentive to strike a settlement of greater benefit to homeowners and taxpayers.
The investigators have yet to gather many documents, conduct depositions or assemble tallies of aggrieved homeowners. They don’t yet have a good handle on the number of wrongful foreclosures, the amount of fraudulent documents filed in local courts or the volume of legal instruments processed by so-called “robo-signers,” the agents that lenders employed to process foreclosure filings en masse without examining the underlying paperwork.
“The evidence a prosecutor would use is not in the possession of the prosecution,” said one person familiar with the ongoing settlement talks.
Even Richard Shelby, the ranking member of the Senate Banking Committee, and a long-standing critic of Wall Street, is not happy with the lack of investigations:
We need a full-fledged investigation,…There’s no substitute for a thorough investigation and finding of fact
The piece later details the evidence the prosecutors say they have obtained, and shows how it actually adds up to very little. This was a feature, not a bug. Consistent with the objective of doing nothing more than provide air cover for the banks, no meaningful investigations were conducted (and on top of that, there have been plenty of other irregularities in how the discussions were conducted). We pointed out this was essential to have any negotiating leverage: a party agrees to settle in order to escape possible litigation. The HufPo article underscores that point:
“I would never want to go into a negotiation without solid evidence of actual misconduct to hold as leverage over my counterpart,” said Neil M. Barofsky, the former special inspector general for the Troubled Asset Relief Program, which was crafted to bail out teetering banks. “It would also be very dangerous from a public policy perspective to waive all future claims as part of such a settlement if you do not have a good sense of the size, scope and severity of the underlying misconduct.”
If you don’t have a credible threat to launch a suit, why should anybody bother? The answer here is obvious: this isn’t a “settlement”; it’s a cash for a broad release (effectively, an indemnification). And since the AGs have done nada in the way of a probe, only the banks know the value of that waiver, and they won’t enter into a deal unless they think it is a bargain.
And indeed, the intended deal is a “get out of liability for almost free” card:
….expedience now appears to be trumping other considerations in settlement talks with major mortgage servicers. Despite failing to marshal a strong case proving misconduct during the foreclosure crisis, the government is seeking to craft a settlement quickly, in the hopes that this will inject greater certainty into the financial system, stabilize home prices and add vigor to a flagging economy.
Ah, yes, if we just give the banks another bailout, surely that will fix the economy! We can see how well that movie is working. As if “fixing the economy” is a good reason to ignore crooked behavior. By that logic, the government shouldn’t go after companies that sell beef full of e-coli because they provide employment.
And have no doubt, the Administration’s fingerprints are all over any deal:
The Justice Department is pressing state attorneys general to release the banks from liability for a host of alleged violations in exchange for a far-reaching settlement, people familiar with internal discussions said.
And the AGs have been sold a complete bill of goods:
The government fears that if it can’t stanch the flood of foreclosures by lowering troubled homeowners’ monthly mortgage payments — and if mortgage servicers cannot resume taking possession of homes for which borrowers have long been delinquent and sell them to people able to afford them — the housing crisis could drag on for years, keeping the broader economy in a feeble state. This is the scenario the government is seeking to stave off by striking a swift settlement with banks, restoring legal clarity to the foreclosure process and providing additional relief for distressed borrowers.
By including assistance for homeowners in the settlement agreement — like loan modifications that reduce payments or the overall amount owed — state and federal authorities said they believe they can help the housing market recover.
This is utter rubbish. First, the AGs are NOT going to “restore clarity to the foreclosure process.” Any action by the AGs will have no impact on the judiciary (the settlement will apparently include useless boilerplate about how banks will follow the law. They are supposed to be following the law regardless; an extra affirmation is pointless). The reason the banks are having so many trouble foreclosing is pervasive problems with how ownership interests were handled in the securitization process. In most cases, they are not amenable to easy fixes, which is why there has been so much fraud committed in courts all over the country.
The story indicates that the states are willing to sell out because any cash settlement would help fill yawning state budget gaps. But what we have been told by well placed sources is that the banks will take a deal only if it is very close to free: a minimal cash component (the $30 billion number in the HuffPo article is pure smoke and mirrors), with the rest being credits of various sorts, including for past mortgage mods. Oh, and any settlement is tax deductible, further lowering what little real cost there will be.
To the extent the AGs believe they need to bribe the banks to do mods, they’ve been snookered. The Fed and the OCC had the power to make them happen, now. The biggest banks all have large second lien portfolios (almost entirely HELOCs). They’ve refused to modify first mortgages because it’s a lot of work they don’t get paid for, and they make good money foreclosing. And they are able to keep borrower looking current on seconds via a combination of bullying and accepting very skinnied down payments.
If the Fed and the OCC told banks that they had to write down the second liens on delinquent mortgages, and write off the second liens on homes where they started foreclosing on the first, you’d see a 180 degree change in behavior. Banks would be falling all over themselves to do mods Indeed, if these regulators were to take this step (which is within their power) you’d probably see an bank change of heart on bankruptcy cramdowns too (banks twice beat back legislation to write down the value of a mortgage to the market value of the house in bankruptcy proceedings, which is done with very other type of secured consumer debt).
If you are as upset with this as I am, call your state attorney general and give him a piece of your mind. You can find their phone numbers here.
<b>News</b> of the World Hacked Cops Investigating <b>News</b> of the World Hacking
We already know that the News of the World hacked the phones of virtually everyone in England, including dead people and the prime minister and, probably, you. But with the latest revelation, the scandal has actually ...
<b>News</b> of the World Hacked Cops Investigating <b>News</b> of the World Hacking<b>News</b> Corporation Looks to Bolster Stock With Buyback Plan <b>...</b>
The company's stock price has dropped since the revelations of a wider phone hacking scandal at News of the World.
<b>News</b> Corporation Looks to Bolster Stock With Buyback Plan <b>...</b>CREW Calls On Congress To Investigate <b>News</b> Corp. After Phone <b>...</b>
The watchdog group Citizens For Responsibility and Ethics in Washington is calling on Congress to investigate Rupert Murdoch's News Corp. for evidence that the company's sprawling phone hacking scandal reached the United ...
CREW Calls On Congress To Investigate <b>News</b> Corp. After Phone <b>...</b>bobby gap ferguson
<b>News</b> of the World Hacked Cops Investigating <b>News</b> of the World Hacking
We already know that the News of the World hacked the phones of virtually everyone in England, including dead people and the prime minister and, probably, you. But with the latest revelation, the scandal has actually ...
<b>News</b> of the World Hacked Cops Investigating <b>News</b> of the World Hacking<b>News</b> Corporation Looks to Bolster Stock With Buyback Plan <b>...</b>
The company's stock price has dropped since the revelations of a wider phone hacking scandal at News of the World.
<b>News</b> Corporation Looks to Bolster Stock With Buyback Plan <b>...</b>CREW Calls On Congress To Investigate <b>News</b> Corp. After Phone <b>...</b>
The watchdog group Citizens For Responsibility and Ethics in Washington is calling on Congress to investigate Rupert Murdoch's News Corp. for evidence that the company's sprawling phone hacking scandal reached the United ...
CREW Calls On Congress To Investigate <b>News</b> Corp. After Phone <b>...</b>I’ll be brief because this article from the Michigan Messenger (hat tip furzy mouse) stands on its own. Readers may recall that some registers of deeds (the county officials responsible for recording mortgage transfers) are less than happy at the way MERS has deprived their governments of income by skipping recording fees for some mortgage transfers (that was the point, after all) and making a mess of title records.
Two counties in MIchigan, Oakland and Ingham, have decided to do something about it. To my knowledge, this is the first litigation of this type:
Oakland County Treasurer Andy Meisner is suing mortgage giants Freddie Mac and Fannie Mae in the nation’s first federal lawsuit seeking to recoup tax payments never paid on properties that were transferred several times during the height of and during the foreclosure crisis that has gripped the nation over the last few years,
“I do think it’s fraudulent and I do think there is strong evidence to suggest there has been fraud. I do think it is a fraudulent conspiracy,” Meisner said. “We are identfying the people involved and we are systematically working to hold them accountable.”
While Ingham County Register of Deeds Curtis Hertel Jr. would not go so far as to allege a “fraudulent conspiracy” he says that the aim of his lawsuit is to find out just how deep the malfeasance went.
“This is about getting to the truth,” Hertel said Wednesday, standing in front of one of the many foreclosed and empty houses in the city of Lansing. “I believe the crisis has been further exacerbated by a systematic attempt to avoid state transfer taxes in my office.”
Hertel’s lawsuit alleges that the defendants and their agents claimed tax exemptions they were not entitled to. Specifically, the defendants are alleged to have claimed an exemption which prevents the federal government from having to pay the property title transfer company. The defendants claim that Freddie Mac and Fannie Mae are federal entities.
Meisner’s lawsuit alleges the same claim against just Freddie Mac and Fannie Mae.
“Defendants have not paid the Transfer Tax because they have claimed on the face of the documents they have recorded that the transaction is exempt from the Transfer Tax. They sometimes claim the transaction is exempt because they are government entities and, under Michigan statute, government entities are exempt. Other times they claim they are exempt pursuant to federal statute.
“Neither claimed exemption applies. Defendants are federally chartered private corporations and not government entities. Defendants’ federal law exemption from certain taxes does not include the Transfer Tax.”
Both Freddie Mac and Fannie Mae are publicly traded companies, according to their websites.
The official transfer tax rate for counties in Michigan is $1.10 for every $1,000 of value being transferred. So the sale of a $100,000 home would typically carry a $1,100 tax. State taxes on the same transactions stretch even further – $7.50 for every $1,000 of value being transferred.
Those taxes add up, both officials said in interviews. Meisner says Oakland County has lost about $1.5 million from its general fund in the last six years, while those same cases in Oakland meant an estimated $10.5 million kept from the state. Hertel would not put an exact dollar figure on the potential losses caused by the alleged actions of the defendants, but said the county had lost “millions” while the state had lost “tens of millions” in tax revenues.
Update: Reader IF points out the computation in the article regarding the typical fee per transfer is wrong. If the $1.10 per $1000 is correct, the fee would be $110, which even then is on the high side of what I have heard recording fees often are (the question is whether the “transfer tax” is a different beast than a recording fee, and whether it might actually be $1.10 per $100, which would make the $1,100 charge correct). I look to Michiganders to provide input.
The latest report by Shahien Nasirpour at Huffington Post confirms two things you’ve heard here and on some other sites following this sorry affair: first, that Tom MIller, Iowa attorney general who is leading the 50 state attorneys general negotiations on mortgage abuses, is a liar, and second, that any settlement will be a whitewash.
Actually, we already knew Miller was a liar. Shortly after the effort was launched, Miller promised that “”We will put people in jail.” He then started walking that back. Not only did he tell Bloomberg that they were NOT pursuing criminal charges, but per an e-mail:
I was w/ a European documentary maker this weekend who spoke to Miller a few days ago and said Miller relayed the fraud isn’t so bad, everything will be worked out .. the standard line; he’s already made up his mind. He doesn’t want those European governments demanding their money back. The meeting is a photo-op setup because the too-big-to-fail crowd is scared of put-back liability and shorts; they’re working hard to make it appear they’re doing something to quiet everybody down.
Note this message was sent BEFORE MIller made the “jail the baddies” promise that MIller recanted. And it indicates that this entire affair was intended to be an exercise in kabuki theater rather than anything remotely resembling a real investigation.
That brings us to MIller’s second lie. After a staffer ‘fessed up that no investigations were being undertaken, Miller maintained that extensive examinations were underway. That, as Nasiripour indicates, confirming earlier intelligence via Gretchen Morgenson, is complete crap (emphasis ours):
According to sources familiar with the ongoing state and federal probes, state and federal officials have wasted months not digging into the details of the foreclosure crisis, yielding little of value in court and undercutting the lenders’ incentive to strike a settlement of greater benefit to homeowners and taxpayers.
The investigators have yet to gather many documents, conduct depositions or assemble tallies of aggrieved homeowners. They don’t yet have a good handle on the number of wrongful foreclosures, the amount of fraudulent documents filed in local courts or the volume of legal instruments processed by so-called “robo-signers,” the agents that lenders employed to process foreclosure filings en masse without examining the underlying paperwork.
“The evidence a prosecutor would use is not in the possession of the prosecution,” said one person familiar with the ongoing settlement talks.
Even Richard Shelby, the ranking member of the Senate Banking Committee, and a long-standing critic of Wall Street, is not happy with the lack of investigations:
We need a full-fledged investigation,…There’s no substitute for a thorough investigation and finding of fact
The piece later details the evidence the prosecutors say they have obtained, and shows how it actually adds up to very little. This was a feature, not a bug. Consistent with the objective of doing nothing more than provide air cover for the banks, no meaningful investigations were conducted (and on top of that, there have been plenty of other irregularities in how the discussions were conducted). We pointed out this was essential to have any negotiating leverage: a party agrees to settle in order to escape possible litigation. The HufPo article underscores that point:
“I would never want to go into a negotiation without solid evidence of actual misconduct to hold as leverage over my counterpart,” said Neil M. Barofsky, the former special inspector general for the Troubled Asset Relief Program, which was crafted to bail out teetering banks. “It would also be very dangerous from a public policy perspective to waive all future claims as part of such a settlement if you do not have a good sense of the size, scope and severity of the underlying misconduct.”
If you don’t have a credible threat to launch a suit, why should anybody bother? The answer here is obvious: this isn’t a “settlement”; it’s a cash for a broad release (effectively, an indemnification). And since the AGs have done nada in the way of a probe, only the banks know the value of that waiver, and they won’t enter into a deal unless they think it is a bargain.
And indeed, the intended deal is a “get out of liability for almost free” card:
….expedience now appears to be trumping other considerations in settlement talks with major mortgage servicers. Despite failing to marshal a strong case proving misconduct during the foreclosure crisis, the government is seeking to craft a settlement quickly, in the hopes that this will inject greater certainty into the financial system, stabilize home prices and add vigor to a flagging economy.
Ah, yes, if we just give the banks another bailout, surely that will fix the economy! We can see how well that movie is working. As if “fixing the economy” is a good reason to ignore crooked behavior. By that logic, the government shouldn’t go after companies that sell beef full of e-coli because they provide employment.
And have no doubt, the Administration’s fingerprints are all over any deal:
The Justice Department is pressing state attorneys general to release the banks from liability for a host of alleged violations in exchange for a far-reaching settlement, people familiar with internal discussions said.
And the AGs have been sold a complete bill of goods:
The government fears that if it can’t stanch the flood of foreclosures by lowering troubled homeowners’ monthly mortgage payments — and if mortgage servicers cannot resume taking possession of homes for which borrowers have long been delinquent and sell them to people able to afford them — the housing crisis could drag on for years, keeping the broader economy in a feeble state. This is the scenario the government is seeking to stave off by striking a swift settlement with banks, restoring legal clarity to the foreclosure process and providing additional relief for distressed borrowers.
By including assistance for homeowners in the settlement agreement — like loan modifications that reduce payments or the overall amount owed — state and federal authorities said they believe they can help the housing market recover.
This is utter rubbish. First, the AGs are NOT going to “restore clarity to the foreclosure process.” Any action by the AGs will have no impact on the judiciary (the settlement will apparently include useless boilerplate about how banks will follow the law. They are supposed to be following the law regardless; an extra affirmation is pointless). The reason the banks are having so many trouble foreclosing is pervasive problems with how ownership interests were handled in the securitization process. In most cases, they are not amenable to easy fixes, which is why there has been so much fraud committed in courts all over the country.
The story indicates that the states are willing to sell out because any cash settlement would help fill yawning state budget gaps. But what we have been told by well placed sources is that the banks will take a deal only if it is very close to free: a minimal cash component (the $30 billion number in the HuffPo article is pure smoke and mirrors), with the rest being credits of various sorts, including for past mortgage mods. Oh, and any settlement is tax deductible, further lowering what little real cost there will be.
To the extent the AGs believe they need to bribe the banks to do mods, they’ve been snookered. The Fed and the OCC had the power to make them happen, now. The biggest banks all have large second lien portfolios (almost entirely HELOCs). They’ve refused to modify first mortgages because it’s a lot of work they don’t get paid for, and they make good money foreclosing. And they are able to keep borrower looking current on seconds via a combination of bullying and accepting very skinnied down payments.
If the Fed and the OCC told banks that they had to write down the second liens on delinquent mortgages, and write off the second liens on homes where they started foreclosing on the first, you’d see a 180 degree change in behavior. Banks would be falling all over themselves to do mods Indeed, if these regulators were to take this step (which is within their power) you’d probably see an bank change of heart on bankruptcy cramdowns too (banks twice beat back legislation to write down the value of a mortgage to the market value of the house in bankruptcy proceedings, which is done with very other type of secured consumer debt).
If you are as upset with this as I am, call your state attorney general and give him a piece of your mind. You can find their phone numbers here.
<b>News</b> of the World Hacked Cops Investigating <b>News</b> of the World Hacking
We already know that the News of the World hacked the phones of virtually everyone in England, including dead people and the prime minister and, probably, you. But with the latest revelation, the scandal has actually ...
<b>News</b> of the World Hacked Cops Investigating <b>News</b> of the World Hacking<b>News</b> Corporation Looks to Bolster Stock With Buyback Plan <b>...</b>
The company's stock price has dropped since the revelations of a wider phone hacking scandal at News of the World.
<b>News</b> Corporation Looks to Bolster Stock With Buyback Plan <b>...</b>CREW Calls On Congress To Investigate <b>News</b> Corp. After Phone <b>...</b>
The watchdog group Citizens For Responsibility and Ethics in Washington is calling on Congress to investigate Rupert Murdoch's News Corp. for evidence that the company's sprawling phone hacking scandal reached the United ...
CREW Calls On Congress To Investigate <b>News</b> Corp. After Phone <b>...</b>travelers bobby ferguson
<b>News</b> of the World Hacked Cops Investigating <b>News</b> of the World Hacking
We already know that the News of the World hacked the phones of virtually everyone in England, including dead people and the prime minister and, probably, you. But with the latest revelation, the scandal has actually ...
<b>News</b> of the World Hacked Cops Investigating <b>News</b> of the World Hacking<b>News</b> Corporation Looks to Bolster Stock With Buyback Plan <b>...</b>
The company's stock price has dropped since the revelations of a wider phone hacking scandal at News of the World.
<b>News</b> Corporation Looks to Bolster Stock With Buyback Plan <b>...</b>CREW Calls On Congress To Investigate <b>News</b> Corp. After Phone <b>...</b>
The watchdog group Citizens For Responsibility and Ethics in Washington is calling on Congress to investigate Rupert Murdoch's News Corp. for evidence that the company's sprawling phone hacking scandal reached the United ...
CREW Calls On Congress To Investigate <b>News</b> Corp. After Phone <b>...</b>travelers bobby ferguson
Thursday, June 23, 2011
Making Money Internet
Washington Post Managing Editor Explains Why Focusing On Direct Revenue From Consumers Is Short-Sighted
from the free-is-expensive,-but-it-can-pay-off dept
From the title of this article in Forbes, by Raju Narisetti, the managing editor of the Washington Post, you might think it was going to be another rant against "free" online and talk up the wonders of paywalls. After all, the article is called "Why Free is Very Expensive." But, the article actually is much more nuanced, and effectively explains why folks at The Washington Post think that a paywall doesn't really make much sense:
Here is why revenue from readers is unlikely to be our salvation.
-- A metered model makes your business susceptible to the will of a few readers--those who consume the most articles/pages. Often, less than 5% of these kinds of visitors account for nearly 50% of your page views. And they have very little barriers to exit.
-- Aggregators, like Huffington Post, will still find ways to deliver your content for free and often with more engaging technologies since they don't have to invest much in content creation.
-- The infrastructure for payment systems, data security, customer service, reader acquisition and retention for digital subscriptions costs a bundle to build and run, yet your consumer price points need to be low, making the return on investment a clear challenge.
-- Our Web sites were to be trusted safe havens protecting, informing and entertaining you amid a deluge of digital content. And when you came to us, we would make money off you. But that was before your friends became your trusted sources. There are 600 million of you on Facebook and we know we need to be there too with our content. We haven't even begun to fathom that monetization challenge. So, we could up end an expensive drawbridge around Web sites that are already losing their value?
-- Scrolling on Web sites has always been a poor experience for consuming news. Now, just as new devices and digital experiences--none invented by major news brands--create richer engagement outside our sites, we are talking about charging readers for sub-optimal Web site consumption.
He does point out, as everyone agrees, that it is costly to run a major modern news operation, and that the digital business models for large publications like the one he works for haven't kept pace. But, thankfully, unlike some of his competitors, he wants to look forward and not backwards. He's looking at the ways large successful internet companies are making more and more money by increasing convenience and building more value for users:
I, for one, think that the golden age of targeted digital advertising is yet to come. Do we really want to trade that larger opportunity for the much smaller and unreliable pursuit of consumer dollars? I also wonder if we aren't better off redeploying our newsroom resources to create new revenue streams and more engaging digital platforms than trying to make the traditional Web experience better and charge for it....
Free is indeed very expensive. But, what the prolonged and knee-jerk debate about free vs. paid inside our news organizations shows is that we still have what led us here in the first place: An imagination deficit. Rather than apply an �all or nothing' approach focused, perhaps wrongly, on just our Web sites, we should be willing to make creative bets on our business model. We continue to make what is being consumed--in large quantities. It is time we figured out how to make it easier, more engaging and useful. Despite their soaring valuations, Facebook, LinkedIn and Twitter don't create much, if anything at all, by way of original content. And, for that matter, neither do Google or YouTube. They simply make it easy, useful and engaging to their audiences. These are incredibly disruptive times and one thing is clear to me: There isn't time or room for incrementalism at major news organizations.
It's nice to finally see someone at a major publication recognize this point that many of us have been making for a while. For all the talk of paywalls, there's been very little done to actually increase the value of the online experience for users at these newspaper sites. There's been very little effort to build and support community. It's nice to see that at least one major paper is hopefully moving in that direction.
20 Comments | Leave a Comment..
Washington Post Managing Editor Explains Why Focusing On Direct Revenue From Consumers Is Short-Sighted
from the free-is-expensive,-but-it-can-pay-off dept
From the title of this article in Forbes, by Raju Narisetti, the managing editor of the Washington Post, you might think it was going to be another rant against "free" online and talk up the wonders of paywalls. After all, the article is called "Why Free is Very Expensive." But, the article actually is much more nuanced, and effectively explains why folks at The Washington Post think that a paywall doesn't really make much sense:
Here is why revenue from readers is unlikely to be our salvation.
-- A metered model makes your business susceptible to the will of a few readers--those who consume the most articles/pages. Often, less than 5% of these kinds of visitors account for nearly 50% of your page views. And they have very little barriers to exit.
-- Aggregators, like Huffington Post, will still find ways to deliver your content for free and often with more engaging technologies since they don't have to invest much in content creation.
-- The infrastructure for payment systems, data security, customer service, reader acquisition and retention for digital subscriptions costs a bundle to build and run, yet your consumer price points need to be low, making the return on investment a clear challenge.
-- Our Web sites were to be trusted safe havens protecting, informing and entertaining you amid a deluge of digital content. And when you came to us, we would make money off you. But that was before your friends became your trusted sources. There are 600 million of you on Facebook and we know we need to be there too with our content. We haven't even begun to fathom that monetization challenge. So, we could up end an expensive drawbridge around Web sites that are already losing their value?
-- Scrolling on Web sites has always been a poor experience for consuming news. Now, just as new devices and digital experiences--none invented by major news brands--create richer engagement outside our sites, we are talking about charging readers for sub-optimal Web site consumption.
He does point out, as everyone agrees, that it is costly to run a major modern news operation, and that the digital business models for large publications like the one he works for haven't kept pace. But, thankfully, unlike some of his competitors, he wants to look forward and not backwards. He's looking at the ways large successful internet companies are making more and more money by increasing convenience and building more value for users:
I, for one, think that the golden age of targeted digital advertising is yet to come. Do we really want to trade that larger opportunity for the much smaller and unreliable pursuit of consumer dollars? I also wonder if we aren't better off redeploying our newsroom resources to create new revenue streams and more engaging digital platforms than trying to make the traditional Web experience better and charge for it....
Free is indeed very expensive. But, what the prolonged and knee-jerk debate about free vs. paid inside our news organizations shows is that we still have what led us here in the first place: An imagination deficit. Rather than apply an �all or nothing' approach focused, perhaps wrongly, on just our Web sites, we should be willing to make creative bets on our business model. We continue to make what is being consumed--in large quantities. It is time we figured out how to make it easier, more engaging and useful. Despite their soaring valuations, Facebook, LinkedIn and Twitter don't create much, if anything at all, by way of original content. And, for that matter, neither do Google or YouTube. They simply make it easy, useful and engaging to their audiences. These are incredibly disruptive times and one thing is clear to me: There isn't time or room for incrementalism at major news organizations.
It's nice to finally see someone at a major publication recognize this point that many of us have been making for a while. For all the talk of paywalls, there's been very little done to actually increase the value of the online experience for users at these newspaper sites. There's been very little effort to build and support community. It's nice to see that at least one major paper is hopefully moving in that direction.
20 Comments | Leave a Comment..
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Aufait Daily <b>News</b>: Helmet | Ads of the World™
Aufait Daily News: Black box Newer � Chery Motors: Bullets Older. Ads of the World is an advertising archive and community showcasing fresh campaigns daily from around the world. Read more ...
Arrowheadlines: Chiefs <b>News</b> 5/19 - Arrowhead Pride
Good morning, Kansas City Chiefs fans and welcome to Arrowheadlines. Today's Chiefs news includes a link to the entire Sports Illustrated article on the Alabama tornado, a story on McCluster, and an update on everyone's (looking at you, ...
Chesley 'Sully' Sullenberger Becoming CBS <b>News</b> Contributor
NEW YORK — The pilot who safely brought down that plane in the Hudson River has landed at CBS News. The network announced Thursday that Captain Chesley Sullenberger III, also known as Sully, has been named as Aviation and Safety Expert.
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Wednesday, May 18, 2011
Surface Encounters on the specialty of countertops and online business
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Space News!: A 'Nearby' Habitable Planet And Rogue 'Planets' That Don't Orbit Any Stars.
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Tuesday, May 17, 2011
Surface Encounters on the subject of kitchen countertops and company
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Brad Friedman and Desi Doyen: 'Green <b>News</b> Report' - May 17, 2011
IN 'GREEN NEWS EXTRA' (see links below): Nat'l Academies of Science climate disinformation campaign; At industry's request, EPA delays rule on industrial emissions; CA sea lions get death penalty for eating salmon; Solar Plane Makes ...
Arrowheadlines: Chiefs <b>News</b> 5/17 - Arrowhead Pride
Good morning, Chiefs fans. Another slow day of offseason Kansas City Chiefs news. Enjoy.
Social <b>news</b> show 'What's Trending' debuts online - Lost Remote
The show also featured a “like or dislike” segment that used sentiment analysis powered by Singley Mackie to see how the social world is reacting to the addition of Ashton Kutcher on Two and Half Men and other viral stories in the news. ...
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Peter Risdon Says:
May 16, 2011 at 2:40 pm | Reply
The paragraph you quoted from ends with this sentence:
“According to the best-sited stations, the diurnal temperature range in the lower 48 states has no century-scale trend.”
That was a surprise given the tenor of this post: “… maybe this is the end to questions as to whether surface temperature increases actually exist.”
Did you mean that we can now say the answer to that is that surface temperature increases do not exist? Or that, pace Keenan in the WSJ, the data do not contain statistically significant trends?
andyrussell Says:
May 16, 2011 at 2:58 pm | Reply
I don’t think diurnal temperature range is very important. Do you?
What’s more, the “century-scale” bit covers some interesting detail. Before Fall et al., it seems that the only work on diurnal temperature range showed a negative trend from the mid-century to 1980s-ish. What Fall et al. found was that this has increased again since the 1980s. So there’s no “century-scale trend”.
But that tells you very little about mean surface temperature trends.
Mark Says:
May 17, 2011 at 10:45 pm
I have heard it claimed that the reduction in diurnal temperature range over the past few decades provides evidence that GHG increases are responsible for the warming. In that sense, some people think diurnal temperature range is important.
Incidentally, I don’t think Fall et al. were the first to find that DTR has increased since the 1980s. I read a paper that said much the same thing a few years ago.
Sorry for the lack of references to back up these statements. I’m a little too busy at the moment to chase them up.
andyrussell Says:
May 18, 2011 at 8:43 am
Ok, so I’m probably not giving DTR as much significance as it deserves.
My point is that I don’t really care about DTR. I don’t think I know anyone who has a particular interest in DTR. If this paper had been published by anyone else I wouldn’t have looked at it. It’s not very interesting. It’s just another paper on climate observations that fits in with the “consensus view of climate change” or however you want to put it. That’s useful, but not to me or most people.
If, however, the paper had shown what Watts has been saying it would show for quite a while now (i.e. that the postitive temperature trend in the surface station record in the US was an artefact of poor station siting) then that would have been very interesting. To me and to many other people.
But it didn’t.
Ben Says:
May 16, 2011 at 4:49 pm | Reply
So Peter… If the diurnal high and the diurnal low both rise by 1°C, you think this means there has been no warming? After-all, the diurnal range hasn’t changed! Others might draw a different conclusion.
Peter Risdon Says:
May 17, 2011 at 8:26 am | Reply
I understand diurnal range has significance, and the relationship between day and night time temperature ranges is important, especially with regard to the period 1950 to 1980 when the effect of man-made global warming, it has been argued, was masked by a cooling but revealed by the changes in the relationship between these ranges.
I further understand that this argument is based on the idea that human pollution caused this daytime cooling, that it affected the range of day time temperatures as well as the difference between night time temperatures which continued to show warming, and daytime ones that didn’t. This makes day time temperature range significant: if this is right it would be expected to show a variation that correlates with human activity.
But this isn’t my field; I’m just reading what I can in an attempt to understand as much as possible about an important issue and, for me at least, that means reading Watts and reading this blog. Just searching out stuff you’re already disposed to accept isn’t good enough. My comment was prompted by what struck me as a somewhat partial quotation and exasperation: I’m with Feynman when he said you should point out the problems with a theory, not just the things that support it.
[It's not really a "partial quotation" is it? That sentence you are interested in is stuck on the end of the abstract as a new paragraph and isn't really related to the 2 sentences I quote and which are related to the subject of this post. I'm not really interested in DTR and I doubt Watts was either. - AR]
At least Watts invites people with different views to post on his blog and has been at the forefront of attempts to cross the ideological divide, not least with Judith Curry.
Ben, of course you’re right. Andy, a century is an arbitrary scale, of course.
I’d still be interested in your take on statistical significance.
JMurphy Says:
May 17, 2011 at 12:05 pm | Reply
In what way has Watts atempted to cross “the ideological divide” ?
Ben Says:
May 17, 2011 at 3:16 pm | Reply
Peter, I encourage a critical (i.e. thoughtful) reading of Anthony’s blog but my god do you really think he’s “at the forefront of attempts to cross the ideological divide”? Anthony has done more to harden denialist thought than anyone, with the possible exception Marc Morano.
The “different views” he solicits are unthreatening fig-leaves.
andyrussell Says:
May 17, 2011 at 3:24 pm | Reply
I’ve got no problem with most of what Keenan says, although he’s not the first/only person to be saying these things. There’s a JoC paper from 2010 and it was one of the useful points to come out of the UEA email enquiries (i.e. working more with stats people). Not sure where the funding was supposed to come from for these new people though!
I suppose the bigger problem comes down to climate science covering so much stuff – you can’t just look at problems from a stats/dynamics/modelling/chemistry/radiation/whatever perspective for too long before a) not getting very far or b) needing to doing something you’ve not done before.