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Look who’s a media expert now

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The media vultures continue to circle over Salon, hoping, for whatever schadenfreude-fueled reasons, that all the noise about our imminent demise might actually be true this time around. We’ve learned, pretty much, to live with that around here, continuing to do our jobs and grateful for the strong support we receive from our subscribers. But sometimes something comes along that must be commented on.

In a piece in the Online Journalism Review titled “Salon to Leave Bloated Carcass?,” Mark Glaser half-heartedly surveys the landscape of Salon-deathwatch coverage. He cites my post of earlier this week, then approvingly quotes a post from this blog’s comments board (he calls it “more believable”) that criticizes Salon’s business acumen.

Glaser doesn’t seem to have noticed that this anonymous poster’s pseudonym, “Bay Aryan,” is indicative of his political perspective — which is, shall we say, somewhere in the general vicinity of Adolf Hitler. It would have taken Glaser about 30 seconds to scroll down in this blog’s comments and find sage commentary from “Bay Aryan” like this: “Hey, Scott Rosenkike, I hear that Salon might go bankrupt at the end of the month! Woohoo! Death to the liberal Jew-run media!”

So thanks to the Online Journalism Review for striking one more blow toward granting anti-Semitism some badly needed credibility. It’s this kind of careful vetting of sources that has made the OJR into the power that it is today.

My attitude towards the comment boards here has been the usual online approach of “let a hundred flowers bloom, and ignore the occasional weed.” I’m happy to say that the other posters who occasionally comment — whether they agree with me or disagree — have generally managed both to remain civil to one another and to give the likes of “Bay Aryan” a cold shoulder. How ironic that it’s a “Journalism Review” that fails to make such distinctions.

Rumors of our demise…

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I know it’s easy to read our latest financial filings and assume, as some correspondents have, that Salon’s tragic fate is already a done deal.

Here’s the situation: We are a public company, I am an executive of the company, and as such there is no way I can sit here and go into detail about all the steps we’re taking to secure Salon’s future. Our SEC filing, upon which all the coverage has been based, specifically stated that Salon would run into trouble if it fails to raise new funds. Somehow that conditional clause seemed to drop away from most of the press reports. Sure, nothing in business is certain, but Salon also has a long history of raising the money it needs to survive.

This is the quote from our CEO, Mike O’Donnell, in our press release:

“We are in active, continuing discussions with potential investors to complete an equity financing that would give the company financial stability for 2003. Salon has reported the issuance of notes with equity conversion features in recent months and believe these will become part of a significant round.”

Unlike the AP, which didn’t even bother to call us for comment before running its imminent-death notice, this CBS Marketwatch report tells more of the story from our side.

Those of you with long memories will recall that Salon’s imminent death has been predicted with almost clockwork regularity over the past several years, each time we have filed a quarterly statement with the SEC. And yet here we are. When we celebrated our seventh anniversary last fall, David Talbot published an amusing review of some previous — and inaccurate — predictions of our doom. It’s worth another look as the vultures gather once more.

No future? The Well is well

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I respect Dave Winer — and, as the founder of UserLand, which supplies the software this and all Salon Blogs run on, he is a business partner and general godfather of our little corner of the blogosphere. But he wrote something today that I need to offer a different perspective on.

  At a party last week I met the former CEO of The Well, Maria Alioto. We talked about her experience. A total parallel to AOL. Good start, probably was necessary for the Web to get going. The core of the West Coast Web. The meeting place for the future staff of Wired and EFF. All good things. But in the mid-90s when she came on, it had no future. As AOL had no future when Time-Warner was snookered into taking their stock.

I’m assuming this refers to Maria Wilhelm, who was Well CEO at a time when, yes, the folks who owned the Well had a notion of trying to compete with AOL. That didn’t work for a bunch of reasons — including a very important one, that the Well’s users didn’t want it to be like AOL.

But to say that the Well had “no future” then is demonstrably wrong, unless “future” means “big growth that grabs the attention of Wall Street,” which is not what I think Dave means. The Well had the future then that you can find in its present existence — as a thriving online community with thousands of interesting posts each week. So what if it didn’t grow to become AOL-sized? The Well was always a different beast — a for-pay community when that was unfashionable, a “closed door” space (only members can read most of the conferences) rather than a fully public environment, and an online place where posting under your real name is the norm, and you pretty much always know who you’re talking to. These attributes may not be what everyone is looking for as they choose their online homes, but they help make the Well unique.

Salon acquired the Well back in 1999 and from where I sit (as a Well member since, I think, 1990) it remains enormously important to us in many ways. Most of the Well remains “behind closed doors” to non-members, but if you’re interested in checking it out, you can look at a couple of areas that are open to anyone to read: the “Inkwell.vue” conference, which features interviews with authors (Cory Doctorow’s in there now); and the new “Pre.vue,” a members-organized conference that offers a taste of the range and depth of the Well’s conversations.

The new Salon Premium

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Blogging has been scant because we’ve been working feverishly on our new setup for Salon, which is now live. (David’s letter announcing this is here.)

The idea here is an extension of our Salon Premium plan, with a twist. We’re offering two ways to access our original content. You can pay to subscribe. Or you can look at an ad and then get a “day pass” to the site.

We already have close to 50,000 current subscribers (with close to 60,000 who have ever signed up). That’s not enough on its own to get us to the break-even point — but it’s far more successful than the choir of Salon naysayers would ever have given us credit for. We never wanted to move to an “all-subscription” site without providing some means for people to read our articles who couldn’t afford to — and for newcomers to sample what we do here.

I know that there are people who still feel that Web content should be free. Certainly the Web is built on linking, and linking isn’t easy when sites throw up subscription gates. That’s why we offer a precis of every subscription-only story on the site; it’s not full-content but it’s more than just a headline.

The truth is that free, professional journalistic content, content created by people who get paid for it, only makes sense if you’re selling something else — subscriptions to a print magazine, say. For Salon, or any other standalone independent that needs to pay not only for content but for bandwidth and software and health plans for employees and so forth, some variation on the subscription plan is the only way to go. We’ve tried to make ours open and flexible — to keep our gates passable even as we try to support our business.

We’re fortunate enough that such a large group of Web readers think what we do is worth paying for. And we’ll keep working like crazy to make as many of our subscribers as we can feel like they’ve gotten more than their money’s worth.

More AOL blues

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There’s a valuable conversation in the comments on the AOL story just below.

“This is the HBO strategy,” John Robb writes. Hmmm. To me, the HBO strategy is a matter of putting must-have shows (“content”) like “The Sopranos” in a “you can’t get it anywhere else” basket. If you want your “Sopranos,” you have no choice but to become an HBO subscriber, or wait for the DVDs (or borrow a friend’s tapes — which points to the way file-sharing and P2P ultimately undermine the HBO model, but that’s another argument). And I guess I don’t see where AOL has, or has announced plans to have, that sort of must-have content. Locking Time Warner magazines away from the Web and into proprietary AOL spaces isn’t really the same, since if you want your Entertainment Weekly all you have to do is buy it at the newsstand or subscribe. Maybe that benefits AOL Time Warner as a whole (since one way or another you’re spending some money on their content), but it hardly seems to make AOL a “must have” service.

In posting my comment I knew people would bring up Salon’s own for-pay services, and I wasn’t disappointed. “Why would anyone pay *anything* for any content on the web?,” Todd asks. We have roughly 45,000 people paying for Salon Premium now, and while that isn’t the kind of number that will mean anything in an AOL-scaled universe, we think it’s pretty successful for Salon, and it’s certainly been a key part of helping keep us afloat in the rough waters of the last two years. I’m sure each Salon subscriber has a slightly different answer to Todd’s question, but I think many of them are variations on a simple theme: Readers value whatever we do here at Salon that is unique and independent.

The better we fulfill that role — and there are days we do it better and days we don’t — the better we’re serving our subscribers. So as a business, it seems to me, we’re in a fundamentally different universe — in scale and in appeal — from AOL. As a giant media conglomerate , AOL can’t possibly sell itself as “independent”; and it is now very publicly struggling to figure out what it can offer in the way of “unique.”

That’s why I think Pat Powers’ generally astute comment — “Salon and AOL are attempting to make this work with large staffs and expenses, but then, you both have a lot of content. The question is, how compelling is your content?” — asks the right question but works from the wrong data. Salon’s sixty-or-so employees may be “large” compared to the one-person business Pat refers to, but we’re minuscule compared to AOL. And purely by quantity, we have very little content compared to AOL; but everything we publish (except for our AP wires and a couple of syndicated columns) is completely unique to us. There’s just no comparison. Pick your simile: it’s like the difference between your corner coffeehouse and Starbucks, or between your independent bookseller and Barnes and Noble, or between…

(As to Doug Wiken’s question about Table Talk: We converted TT to a pay service to save it. We faced a simple choice — shut Table Talk down, since it was a cash drain on the company that brought in no revenue of its own, or turn it into a break-even proposition. We know we changed Table Talk by making it a for-pay service, but at least we saved it from a total shut-down. I don’t expect anyone to be thrilled by that, but I think the last two years of Web-industry armageddon might put it in some context.)

Gavin Becker writes, “It’s time for AOL to adapt and evolve just like the rest of us. ” I think we can agree on that!

PS Dave Winer posts on what a truly bold move on AOL’s part might have sounded like.

And John Robb has a more extensive explanation for what an HBO strategy for AOL could look like.

Baba whitewash

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The New York Times ran a fairly adulatory piece yesterday about the guru named Sai Baba. But as I read I kept waiting for some obligatory reference to the serious charges of pedophilia that have been raised against him. Michelle Goldberg covered these a year ago in this Salon piece. Hey, it wasn’t even Salon Premium.

Powers that be

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It was a holiday weekend, so maybe you missed “Literary Devices,” the short story by Richard Powers that we ran — courtesy of our friends at Zoetrope All-Story. For contractual reasons this story is only going to be online for two weeks. The first week is almost up! So go, read, enjoy. It’s about a mysterious e-mail correspondent, AI-based storytelling, communal myths online, and lots more. Then you can read this great 1998 interview with Powers by Laura Miller.

Am I in hock or not?

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I keep seeing references, as in today’s needlessly snarky San Francisco Chronicle piece about Salon — and even by smart people in the blogosphere who should know better — to Salon’s “$79 million in debt.” So let’s squash this meme one more time before it propagates uncontrollably into the ether, like our old “error message haikus“:

Salon does not have $79 million in debt. Salon has substantially no debt.

Salon’s financials report an accumulated deficit of $79 million for our seven years of operations. If you break this down I think it’s roughly $50 million in cash and the rest is non-cash accounting charges. If you look at the financials over the years you’ll see that our spending for a couple years at the height of the boom (1999 and 2000) accounts for a disproportionate chunk of that.

This money represents losses, not debt. You’d think that’s an important enough distinction for the financial press — and the pundits in the blogging gallery — to get right. Argue all you want about our business strategy, our prospects and the quality of our prose; but let’s keep the facts straight.

Delisting

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I’m getting concerned e-mails from bloggers and readers regarding Salon’s delisting from the NASDAQ Small Cap market.

Here are some things to know:
(1) Salon’s stock is still traded, now on the OTC Bulletin Board.
(2) The delisting does not affect our day-to-day operations.

You can read our FAQ on the listing issue here, and our press release here.

Since Salon is a publicly traded company there are necessary limits and constraints on what I can say here. You might want to read David Talbot’s recent letter from the editor for a review of the past record of doomsaying about Salon’s future.

User comment

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Mike Pence wonders why Salon doesn’t couple user/reader comment/feedback more closely to our articles:

  Don’t miss the user’s comments — they add so much to the value of the content of online magazines like K5.

The loose coupling between Table Talk and Salon causes Salon to be missing this entire dimension of content — user comments linked directly to a story, including the ability of other users to rate the comments of their peers.

Answering Mike involves a little bit of a detour through Salon’s history, but I think it’s worth it, so here goes.

When we started Salon we thought Table Talk would be the place where visitors to our site would go to comment on our articles. We envisioned links at the end of every article pointing to discussions in TT, and we included them for some time. But we quickly learned several things: The people in TT were mostly not that interested in talking about Salon articles; they were extremely interested in talking, but wanted to talk about what they wanted to talk about.

At the same time, we discovered that our readers were inundating us with literally hundreds of e-mails every day responding to the articles we ran. (This was true even before we included the “send us a letter to the editor” link at the end of most articles.)

We chose — I think wisely — not to try to push the river: We let TT evolve in the direction its users were taking it, and since the readers of Salon articles were deciding to use e-mail to respond, we started running their responses on letters-to-the-editor pages.

When we started Salon in 1995 there was no Slashdot or Slashcode and the availability of any kind of software for organizing user interactivity was extremely limited, particularly on the platform we then used (Mac servers!). In the intervening years this realm has of course exploded with cool innovations. Meanwhile, Table Talk has gone through its own evolution, most recently becoming a pay-to-post forum — a move we had to undertake for financial reasons (advertising support for such user forums has largely evaporated since the popping of the Web-industry bubble). And our flow of letters-to-the-editor remains huge.

To return to Mike’s point, we’re still interested in finding better ways to yoke the user-response to the original content. But we can’t simply move Salon onto an existing platform like Slashcode or any of the similar software packages out there, for all sorts of reasons. (We’d have to rebuild our existing content management system, ad serving software, and so on.) So we have an ongoing project here to move our existing letters-to-the-editor model onto one that is more user-directed — there’d be a script-generated letters page corresponding to each article, and users could post their responses themselves. (Other sites do this without calling it “letters”; I think we just like that label’s heritage, its connection with the old print world that Salon grew out of.)

Nothing revolutionary here, for sure — this is something lots of sites do. We’d be catching up. In any case, this plan is on the drawing board, waiting its turn while our stalwart production team deals with other, more immediately pressing projects. My hunch is we’ll have it in place sometime this winter or at latest next spring.