Letting Time Solve the Online News Dilemma

The Guardian's John Naughton isn't looking to micro-transactions or licensing fees from search services to solve the online news business model problems that have come to a head recently. Instead, he's simply waiting for capitalism to do its job in killing off the providers who can't cut it. Once that happens, he says, the remaining organizations will be in a far better position to see what web-goers will pay for online news, and he doesn't think it will inhibit the growth of an increasingly information-rich news ecosystem. "Things have got so bad that Rupert Murdoch has tasked a team with finding a way of charging for News Corp content. This is the 'make the bastards pay' school of thought. Another group of fantasists speculate about ways of extorting money from Google, which they portray as a parasitic feeder on their hallowed produce. ... But what will journalism be like in the perfectly competitive online world? One clue is provided by the novelist William Gibson's celebrated maxim that 'the future is already here; it's just not evenly distributed.' In a recent lecture, the writer Steven Johnson took Gibson's insight to heart and argued that if we want to know what the networked journalism of the future might be like, we should look now at how the reporting of technology has evolved over the past few decades."

Comments

Warning! This is a False Sense of Security!

[eldavojohn]

It's difficult to keep one's head when all about one people are losing theirs, but let us have a go. First of all, some historical perspective might help. When broadcast radio arrived in the US in the 1920s, nobody could figure out a business model for it. How could one generate revenue from something that could be listened to by anyone for free? Dozens of companies were founded to exploit the new medium, and most of them folded. The problem was solved by a detergent manufacturer named Procter & Gamble, which came up with the idea of sponsoring dramatic serials: the soap opera â" and the mass market â" was born.

What you're overlooking is that newspapers have enjoyed revenues for quite sometime. Granted, they've risen and fallen, they are used to this steady income. Radio wasn't used to this income. Models like brand name advertising and recognition ensured its success. Newspapers have made money off of controlling the distribution channels of a similar model with great results, now they are staring down the barrel of a distribution model that they cannot control. They aren't used to this and they certainly aren't handling it well.

What radio saw was a controlled explosion in which they ramped up and expanded across everywhere. That's an easy thing to do because it's positive. What newspapers across the country should be doing is cutting unnecessary jobs, refactoring salaries. Being a columnist is not going to be glamorous any more. The irony is that you're going to be more widely read but be paid less. That might make a lot of people want to quit and find other work ... who could blame them?

This restructuring must happen or you will die. Marketing and endorsements have been the only card you have played (Murdoch's micro charging is proof he's out of ideas) for the past decade as the internet has exploded. The recession is making this more obvious now than it was last year. You had your chance to invent the new way, now you must act or reduce your work force.

The moral is simple: eventually someone will figure out a business model that works for online news. But it may take some time, and lots of outfits will fall by the wayside in the meantime. That's capitalism for you.

You are wrong. There is an end state where no one figures out a way for the model to work. Newspapers go the way of the buffalo just like drive in theaters. You have done yourself and your kind a great disservice by theorizing this false safety net and are only further lulling them into inaction and unemployment. I am not in your business but I see it from the outside and as a customer, use this advice.