The super-popular video sharing site reports that one of the first advertisers, Warner Bros Records, has planned a channel devoted to Paris Hilton's new album. One of its first advertisers, Fox Broadcasting has bought spots on the Paris Hilton Channel to promote the second season of Prison Break.

The idea that placing ads within ads "further blurs the traditional lines between entertainment and its sponsors," does not seem to be an issue with YouTube CEO and co-founder Chad Hurley: "This is a way for advertisers and brands to participate in our community, to allow them more ability to customize the look and feel for the channel, to build an audience through subscription and allow user interaction with the content they created."

Julie Supan, senior marketing director at YouTube, does not believe that young people mind the ads: "Great ads are in essence great content. We're kind of blurring the lines."

The incentive to further explore ads within ads was spurred on by the success of the ad campaign for the movie "Pulse." Deep Focus, the agency directing advertising for "Pulse," ran trailers on YouTube, but wanted another way to reach YouTube's viewing crowd. Deep Focus CEO Ian Schafer proposed running ads on YouTube's homepage for five days prior to the film's Aug. 11 release. The ads offered the trailer along with exclusive clips from "Pulse." Schafer found that audiences watched the trailer, opted to comment, and to spread the word about the film by sending the trailer to friends."For advertisers that are looking to promote their content, " he said, "this is an extremely effective way to get the word out."

While linking and sharing might spread the word on corporate-generated content, the issue remains on how to capitalize on consumer-generated content. "This gets them money in the short term," Allen Weiner, an analyst with Gartner Inc said. "It doesn't solve the bigger issue, which is monetizing consumer-created content. They're not doing that. And they're in the same boat as everybody else. It's trying to come up with mechanisms that can put the content into various buckets so that the good stuff can be parsed out and monetized."

Jon Dube distills some stats from a new report by the Bivings Group on American newspapers and the Internet:

*80 of the nation's top 100 newspapers offered reporter blogs. On 63 of these blogs, readers could comment on posts written by reporters.
* 76 of the nation's top 100 newspapers offer RSS feeds on their websites. All of these feeds are partial feeds, and none included ads.
* Video is offered by 61 of the newspapers.

Newspapers Internet efforts, however, could be undermined further if more advertising is lured in a different direction. Terry Heaton explains a new scheme where Google has teamed up with direct-mail coupon distributor Valpak that will allow local merchants to distribute printable coupons via Google maps. Google says the aim of the initiative is "to improve the user experience and increase traffic at the Maps site." Terry, however, sees it a bit differently: "Of course the real aim is, again, to pull money from local advertisers into the Google coffers, and this is another slap in the face of local media companies and local ad agencies who continue to try and force their reach/frequency model on everybody (and insist that the earth is flat). Google continues to prove that they don't need the blessing of the status-quo to suck cash out of local markets, and this will be the downfall of those who view Internet pure play companies as a nuisance instead of a threat. "

After reading author John Naughton's editorial on the changes wrought by Gutenberg's movable type and Berners-Lee's World Wide Web, Steve Yelvington sharedsome succinct observations about the incredible changes brought on by the Internet: "We are in the midst of a social change so vast it is beyond our comprehension."

Steve, on the impact a lightning storm which struck his home and knoced out his Internet connection had on his family: " My kids would have been happier if they'd been tossed overboard mid-Atlantic. The telephone and television are trivial by comparison. Panic set in. McLuhan was right when he said invention is the mother of necessities."

The ubiquity of the Internet, Steve concludes, has caused it to "become an extension of our minds, and we take it for granted, until it suddenly disappears."

When an old friend from television told Terry Heaton that he did not understand the attraction of social media sites like MySpace, Terry saw it as an opportunity to illuminate what it is that "post-modern" people find satisfying about social media.

As Terry explains: "It is nearly impossible for the enfranchised to understand what motivates the disenfranchised, because -- and I'm writing from a social perspective -- the lenses of the enfranchised are fixed on that which furthers their citizenship, not on the efforts of those trying to gain entry into the club. And this is nothing new, but what is new is the shifting of power through knowledge made possible by technology. This is the 'new thing under the sun' that our generation is witnessing -- the revolution of those who'd rather create their own citizenship than follow the traditional path guarded by the elite.

"Postmodern 'citizens' view the institutions of our world as self-serving and favoring the enfranchised. They see through the command and control mechanisms of the culture, and technology is giving them the opportunity to create their own. The seeming random nature of this blinds modernist thinkers into the belief that it is small and irrelevant, but in the postmodern world, that which seems chaotic is often not, and this is why I think the next four years will be VERY interesting politically in this country."

Further along, Terry discusses how the Internet forces people into the "post-modern exercise of deconstruction" -- people follow links and "bullshit is revealed through the process of deconstruction, so it's harder for the ruling elite to make self-serving statements seem applicable to the general welfare of everybody."

As a result, the average "PoMo"--post-modern person--learns to trust his/her social network more than the experts "because the experts, it turns out, are only in it for themselves -- and they're quite often wrong." PoMos trust their tribe, yet the "postmodern tribe doesn't necessarily identify itself as such, because each tribe exists to serve the individual who determines the make-up of his or her tribe. You may know you're a part of someone's tribe, but you may not. This drives the logical mind insane."

Heaton's advice to all befuddled moderns: "Get involved. What looks like a waste of time today might be the center of our media strategy in the future. "

A short time ago, Nicholas Lemann wrote in the New Yorker "As journalism moves to the Internet, the main project ought to be moving reporters there, not stripping them away." Now, the dean of Columbia's graduate school of journalism appears to be reconsidering his position with the announcement that he was cutting the budget of CJRDaily.org "nearly in half."

The announcement prompted the site's managing editor Steve Lovelady and assistant managing editor Brian Keefer to resign in protest of the cuts. “It’s a fundamental policy dispute about the allocation of resources,” Mr. Lovelady said. “Nick has decided to spend the money on a direct-mail campaign for the magazine, in hopes of saving subscription revenue. To me, that sounds like something out of the 19th century. He’s taking the one, fresh, smart thing he has and gutting it.”

The apparent main reason for the cuts: an inability to raise sufficient funds to keep the site running at full-strength. He told the New York Times that this is "the same quandary confronting most news organizations today — how to pay for an online staff when the site is free to readers." As a result, the popular media-watchdog site will soon start selling advertising, sell its archival material, and hold conferences. A direct-mail campaign will also be launched to increase subscriptions to the print version of the magazine.

Reactions by the journalism community to Lemann's decision were not favorable. Paul Conley believes the move is wrongheaded for many reasons. Conley preferred CJRDaily to the magazine because it "feels as if it's written by people who work in journalism rather than by folks who used to work in journalism...." Bruce Nussbaum of Businessweek calls the decision to cut its "fast-growing" online operation an extraordinary mistake."

Dan Gillmor understands the financial concerns but doesn't believe the move will help CJR's financial position: "You can appreciate the position he faces. This was about money, and he doesn’t think he has enough to operate the magazine and put sufficient resources into the website, too. But this is a move squarely in the wrong direction for the long term, however much short-term sense it may seem to make financially. . . This is a move by an Old Media person, not someone truly looking to the audience and participants of the future. Not surprising, but disappointing."

Jay Rosen in the New York Times: “I’m sure their current subscribers want it in print, but you have to look at your potential subscribers. “Since the profession is going toward the Web, in the long run, that’s the smarter move.”

Jim Romenesko, meanwhile, posts Nicholas Lemann's formal statement on the cuts: "...We have had considerable success in fundraising for Columbia Journalism Review, but not so much that we can keep CJRDaily at the same editorial budget it has had, so we are going to reduce that budget, with regret. But even after the reduction, CJR will have the most substantial Web reporting and writing staff of any publication its size that I know of. We are making that commitment because we believe so deeply in the journalistic promise of the Web, even though, as everybody in journalism knows, it does not yet produce revenues commensurate with its quality. Our goal for Columbia Journalism Review, under the leadership of Victor Navasky, it that it be, in print and on the Web, as strong a media monitor as we can make it on the resources we have."

In the past week, both Wired Magazine and Reuters were alerted to cleaver media fakers in their midst. The authenticity of sources for an article written for Wired by freelancer Philip Chen were questioned when it was discovered that the IP adddresses of a Usenet posting praising Chen, and an email from an individual quoted in the article were the same. Reuters fired photographer Adnan Hajj after Charles Johnson of Little Green Footballs figured out the plume of smoke eminating from a bomed building in Lebanon was far too symetrical to be real.

Mark Hamilton turns his critical eye on the media's reactions to these two new scandals and believes the failings of individuals does not dictate the failings of the media industry: "Let’s get real, and get over this. The individual failing of one person, usually enabled by laxness on the part of higher-ups, isn’t great news but neither is it the end of the world nor an indication of some deep, dark conspiracy nor a telling indicator of the overall failings of media nor an example of standard operating principles nor anything else as grand and sweeping...Turning each individual failing into a symbol for grand, overall failing is just plain silly."

In his most recent Editor and Publisher column, Steve Outing took a look back at his ten-plus years of involvement in creating online media.

Steve describes how he left the world of print journalism back in 1993 for online media: "One of the first things I did back then was start an Internet e-mail discussion list for the then still small group of media people who were starting to work -- or were at least interested in -- this new thing called the Internet and the then-prevalent proprietary online services." Former colleague Harold Owens asked Steve if he had archived any of the discussions from the early days of this list. Much of the early days of the list were not properly archived, so Owens then took to searching the Web. He was able to uncover some of the Online-News archives from 10 years ago. Steve then culled from these discussions some topics that he believes benefit from a look back.

Leading the list of topics is a discussion on what was then called "Smart ads." In 1996, it was a "novel concept" to think that a newspaper could target online advertising "based on the content of news articles." While some thought that what Yahoo! could do, so could an online newspaper, other thought different: "That most newspaper people resisted such notions -- as shown by the mid-1990s discussions on this topic -- is a telling demonstration that even then, pure-play Internet companies were leading the way with innovative ideas, while the newspaper industry wasted time fretting about ideas that challenged "the way we've always done it."

The lesson for today is simple: "it's to free up your media company from old ways of doing things -- to permit new ways of doing business and practicing journalism that directly challenge the status quo." Today's biggest challenge is how to deal with citizen journalism. Steve offers his prediction for 10 years from now: "we'll see that media has incorporated citizen media with mainstream journalism, and journalism as a whole will be better for it. And most of those traditional journalists who argue against the worth of citizen media today will be won over. But I expect that history will show how mainstream news companies lagged while other Internet companies ran with the concept and figured out how to make it pay."

Steve also considered the "widening" of journalists' job descriptions. What triggered this was a discussion in 1996 about the "wisdom of asking reporters to code their stories in HTML," and the opinion that asking reporters to do more than write would "distract them from their core task."

Reporters in 2006, Steve believes, are capable of more than merely writing: Today's reporters ideally should be comfortable not just with writing, but also be able to record digital audio, perhaps shoot some video, collect material for multimedia versions of their stories or for supplemental content that's published online, etc. They can be expected to participate in online chats with readers occasionally. They are expected to write instant news alerts for their organization's website."

The third topic that caught Steve's eye was a discussion on whether an online newspaper should be just another means of delivering traditional news content, or if newspapers should take "an approach of emphasizing things like interactive discussion groups and getting the audience to participate. In one thread, a majority of participants supported the continued domination of "plain old information content" presented in new ways (online) and utilizing new technology. A typical comment: "I think providing high-quality content will be the critical service, just like it is when we smear ink on dead logs."

Steve notes that even then, many journalists did not see the value of how the Internet would increase communication between people and journalists and that people would want to be part of news production. He quotes another forward-thinking editor, Rosalind Resnick on the possibility: ""To me, the incredible thing about the Net is that now the reader *is* the publisher, and amateurs ... are just as likely to succeed in Internet publishing as the New York Times. Or does the newspaper industry arrogantly believe that it can control content of every kind?"

There appears to be little change in the way traditional journalists viewed the Internet, and specifically citizen journalism, in 1995 and how they view it today: "When I hear from some traditional journalists that what they produce is superior to blogs and citizen journalism, I just shake my head. That thinking is "so 1995." Just as the work of professional journalists will continue to record and make history, so too -- on occasion -- will amateur bloggers and eyewitness amateur reporters."

Further: "It doesn't seem to me that we've come far enough along as an industry to make a smooth transition from the old news business models to the new ones that will need to supplant those revenue streams that are beginning to dry up. Today's discussions within the industry have some similarities to those of a decade ago."

Concluding, Steve offers this link to a report he compiled in 1995 of "online activities of of the newspaper industry." The report paints a detailed picture of how far newspapers have come in establishing independent presences online since the days of proprietary online Internet services and bulletin-board services (BBS).

(via CyberJournalist.net)

Time Warner announced on Tuesday a major restructuring of AOL products and services in order to revive the formerly most recognized brand in Internet service providers. The plan will eliminate AOL subscription services for broadband users (currently $15 per month) while it continues to provide a low-speed dial-up service for $9.95 per month. Most AOL services--including its popular email, instant messaging and other software--will be free to all broadband users.

AOL still remains the nation's top Internet service provider with 17.7 million subscribers (down from 26.8m in Sept. '02), yet those subscribers were not generating enough ad revenue for the company. Under the current system, AOL ads were viewed mostly by its own subscribers rather than through a combination of subscribers and random web surfers. As reported in The Economist, in the last quarter, AOL's members "made up 36% of unique visitors who generated 80% of its page views".

Through this shift in strategies, AOL stands to lose " hundreds of millions of dollars in access fees but is gambling that it can more than recoup that money through fast-growing advertising revenue from its AOL.com Web portal and through cost cuts that will reach $1 billion by the end of 2007."

Another consequence of its restructuring came in an announcement on Thursday that it will shed 5,000 jobs, roughly one-quarter of its global workforce over a six-month period. AOL will begin closing customer service call centers in the United States, while it begins to find buyers for its French, German and U.K. businesses. There are currently 3,000 European AOL employees.

Also announced were a number of new features that, starting in September, will free to users with AOL or AIM screen names, including 5G storage on AOL'sX-drive. Non users will be charged a $10 per month fee for this service.