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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."
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.
... who could blame them?
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
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.
My work here is dung.
Capitalism just maximizes for profit not for equity, not fairness. NPR versus Fox News is a great example of this. Fox News will be going strong for a long, long time; regardless of their bias. NPR could be hurt if the government cut off all their funds.
Saying that capitalism will save the day overly simplistic.
Another group of fantasists speculate about ways of extorting money from Google, which they portray as a parasitic feeder on their hallowed produce.
From what I understand Google licenses news from the big news wires as well as from some of the big newspapers. Some of that has been forced through lawsuits.
Before that, they would just crawl news sites and display headlines and summaries, just like in their normal search.
It seems odd. Google has to pay for the privilege of sending them traffic. I wish I could get a deal like that.
If I were Google, the next time the traditional news outlets came to me with their hands out I'd tell them I've decided that I'd be more than happy to remove all their content from my index and no longer "steal" their business. Thew newspaper execs wouldn't like that too much.
Dual Opteron < $600
Will people pay for well-reasoned, researched, and written commentary and opinion columns?
I would, but not the price of a year's subscription for print. I would pay that, however, if I had unfettered access to, e.g., all (or most) Canadian newspapers online; including the small, local papers. Similarly for a major English-language paper from each country.
This simulates the blog experience - access to a multitude of differing viewpoints, but with financing to be able to do a good to excellent job.
Great minds think alike; fools seldom differ.
It seems likely to me that the only way for these guys to really survive is going to be for them to get back to doing real, hard hitting investigative journalism. Anyone can and does do the shallow stuff. Blogs will certainly fill that niche, and they will remain free. What you can charge for is first access to breaking news and good investigative journalism. Want to see where the money trail leads in the bank bailouts? You'll have to subscribe to our premium service. Want to hear which of your local politicians is taking kickbacks from government contractors? That'll be a one time fee, or free to our subscribers.
The days of relying on the news wire are over, guys. Anyone can do that, and they can do it without having to pay a single salary, while making money off of ad content. In a perfectly competitive system, consumer costs approach the marginal costs. When something is basically free, or cheap enough to be ad supported, then it will be. If the audience is limited, or the costs too high, than a fee to read will be used, or some other model will emerge. This is how the market works. It drives non-competitive players out of the market. On a side note, the music industry would do well to adopt a similar strategy (ie the music is free/ad supported, but the concerts are not).
Surely Murdoch's effort to monetarize News Corp content is not 'make the bastards pay', but 'make us pay the bastards'?
The problem with funding news isn't itself news. The reason I watch and respect a news service is because they put resources into investigating the world and offering valuable insight. But I also aknowledge, that I can be occasionally pulled into cheap editorial content.
Guess which one's cheaper.
So, in the commercial news business, the industry has once again shifted drastically towards the cost-conscious editorial and rehashed-news dominance. Everyone's using the same sources, and the sources are dwindling. And because of that, the feeling that any given news provider has unique value is only contained in the unique voice they give themselves, but even that is becoming a formless soup.
The news providers provide less meaningful news, leading to less interest, leading to less money, leading to more editorial dominance, and so on... mostly because the global pool of money has shrunk so much to prevent many real sparks of bold investigative journalism from being worth the risk in the environment. Like with the chicken and the egg, even when we've learned that the egg is far older than any chicken, it doesn't get us more chicken.
That's why I've been turning to the BBC (and the CBC) more often. Put whatever hate you want on socialism, but it really does improve on capitalism when it comes to allowing media to do an effective job at funding news. They're certainly not perfect - but the signal to noise ratio is so much better, in terms of what remains after the bullshit filter, from my biased perspective. PBS/NPR are also nice in spots, but they really have lacked diversity, as administrations have waged ideological wars through appointments.
That's my fix for reliable news sources - make funding more independent from news content, and get more international perspective where possible.
Ryan Fenton
Naked News will survive much longer than their paid service.
We all know we prefer to pay to see women undress than a dressed person reading the same news...
...is that most of the "easy fruit" of reporting that basicly just being on site and report what's happening is easily done by regular people, there's always someone who likes to talk about it. They can blog and twitter and take cell phone pictures and videos on youtube. Other sections are much better covered by special services such as online marketplaces. Other things is just stuff anybody can and do write about like sports events and cd/film reviews and such. If you go through the newspaper with such a critical eye there's not really much that you really can not get from any other source.
Live today, because you never know what tomorrow brings
Many 'large' newspapers are part of media conglomerates that also control cable systems and radio stations. In order for the newspaper protion to survive they will have to cease providing 'free' service to non-subscribers. Cablevision, which controls the Long Island, New York-based Newsday, will be changing their website to a subscription only service starting in June of 2009. Long Island Cablevision subscribers will have access to the site as part of their cable service, while others will have to pay if they want more than 'limited' news. Apparently the S.F. Chronicle will be doing the same thing soon. This is probably the start of a trend that will continue as these companies struggle to make a profit.
Sig this!
In the days where normal people couldn't have their opinions read / heard / seen by the masses, the position of those in organizations like newspapers had some perceived value to them. With the widespread adoption of the internet allowing more people than ever to have their opinions widely spread we are starting to see that many so called "professional" writers are not that much better than amateurs with blogs. We can do what they do for free. There are "proper journalists" who do stand out, but those are the minority, not the majority.
We have also long seen that "news" organizations are nothing more than agenda machines who will seek to feed every story through their political / moral / religious agenda to try and influence their audience......again I ask, what is so different about bloggers? The concept that being part of an organization brings a level of trusted journalism is mostly bullshit. It does carry the guarantee that the story put out will be part of that agenda, regardless of how much they have to twist it out of all context to make it fit.
Any source of "news" is reliant on it's credibility. That credibility is earned, not paid for by sponsors. Traditional news organizations have long held the upper hand and abused the truth for their own ends with nobody else as an alternative. They now face the facts that many bloggers have more credibility than the so called "professionals". They now face the fact that bloggers content is just a click away.
Poor journalists will fall in the face of this, no doubt whining to their unions and anyone who will listen that they're being hard done by and that "the public good" will be harmed by their unemployment while journalists who have stood firm and tried their hardest to "report" the news rather than try to "set" the news to a particular agenda will prosper. Reputation is everything.
Fox News is an perfect example of an agenda network with the name "news" in the title to try and pretend otherwise. Given their collusion with the Bush regime and detachment from reality they deserve all the karma they have coming.
New technology becomes widespread when it makes it easier for human beings to accomplish the same task with less human labor, or to accomplish a new goal that meets human desires. That's why we work to invent technology.
The internet makes it possible now for basically everyone who was a news subscriber before to get their information from any source they can send a web browser to, instead of just dead tree products.
Right now, there are more news outlets and news writers than there are people willing to pay for them. Hard fact.
A lot of people blame the greasy feel of newsprint, or Craiglist, or the current advertising crash, or things they don't like about the local newspaper. That isn't the problem. Right now, the market has too many sellers.
How's it going to end up? I don't know. One interesting fact I found is that for specific, timely information about a specific subject, nothing beats an online message board. For researching my whole path to medical school, residency, and beyond I spent hundreds of hours on the "studentdoctor.net" forums, and I learned more frank information than any book or news article about becoming a physician could have ever taught me.
Ditto for say, learning how to tune a computer for maximum performance, or how to properly install an SSD.
Maybe the news outlets of the future will be identity verified online forums where local citizens discuss local city news. Everyone will receive electronic versions of just the big, world famous newspapers (aka Wall street Journal/New York Times) on devices like the kindle.
Any reasonable person listening to NPR would recognize the built in ideological slant to NPR.
Well, call me unreasonable then because I recognize little if any slant. And I know you will say that's proof of my political leanings but I don't think it is. I listen to NPR because the rest of radio is complete and utter trash. I don't want to listen to a naked girl rub her boobs on the host on air. I'd rather listen to Wait, Wait, Don't Tell Me or Sound Money ... shows I can't see any liberal bias you speak of. You know in Minnesota, they have at least three different MPR stations that play music. Classical music and independent rock. Commercial free. You're also arguing against that when you argue against public radio.
One listener to NOR said it best in a letter read on the air: "Gays, Aids, and Abortion". You are guaranteed to hear at least one story on one of these subjects every freaking day.
I don't know what NOR is but I'll assume you meant NPR. I grew up listening to A Prairie Home Companion and don't recall any of those topics. I don't know what "Gays, Aids and Abortion" has to do with being liberal, they are all issues that should be addressed by anyone regardless of their political affiliation. They are current topics. Have you heard their coverage of the war in Iraq? I've found that to be very unbiased.
Throw in a story about how wonderful (insert liberal politician here) is and how evil (Insert conservative politician here) is and then add some snooty, witty, and amusing story about some obscure idiot and there you have an NPR broadcast.
You have never listened to NPR. Do you know that a lot of the affiliates switch over to BBC World News late at night? Do you find that to have a horribly liberal bias?
NPR should have their government funds cut off. Let George Soros buy it.
Do you know how much money you pay to NPR? Probably a few cents a month--if that. I don't think they would really care if they lost government funding, probably just push their pledge drive out another day. They get so little from the government and so much from listeners that would like to see any kind of news source free without ads, available everywhere in the country. Think about it, people hand money to them ... they don't have to charge like Murdoch wants to.
They may present more liberal topics than conservative topics but at least they don't use verbage that tries to tell me how to think about them (a la Fox News).
I would bet that if you took a citizen from another part of the world and made them listen to NPR they would see it as pretty damn neutral.
How the parent post got moderated insightful, I'll never know.
My work here is dung.
Norwegian newspapers have managed the transition and are now making almost half their money from the online version.
How did they do it? You make it free and accessible, you add services and features. Exclusive video content and articles. The online and print divisions are separate, with dedicated staff and management.
Obviously it helps that Scandinavians read more newspapers than the rest of the world, and that high-speed Internet is widely available and affordable!
Advertising is the most important revenue source, however they now make more money from services like social networking etc. People pay monthly fees for services they actually want.
So at least in Scandinavia online news will continue to be free, hopefully the US and UK will find business models that work for them.
Here are my sources:
http://whatsnewmedia.org/2007/09/23/newspaper-v-internet-if-you-cant-beat-âem-join-âem/
http://abluteau.wordpress.com/2009/04/01/european-newspapers-find-creative-ways-to-thrive-in-the-internet-age/
The problem is that news needs to be critical information, and not just entertainment, in order for democracy to work. Even a truly free market requires critical analysis of products, because it only functions if consumers are making informed decisions.
Let's say we just let the chips fall where they may and cable news becomes the de facto standard for journalism. When you have a handful of corporations whose job is to sell advertising to another handful of corporations, the amount of self-censorship would skyrocket. Common sense tells you that outing your highest paid advertiser for having a sweatshop or poisoning a creek that's giving children cancer is a bad business move.
Imagine this scenario: two journalists approach their editor with a story. One is a fluff piece about a local sports star getting arrested for hiring a prostitute. The other is an investigation into alleged union busting at a major local employer, who also happens to be one of their biggest advertisers. In a purely capitalist model, which journalist gets the green light? Does the editor who cranks out huge profits for less money get the promotion?
A book was written about the subject, with a nice summary on Wikipedia:
According to the book, the pressure to create a stable, profitable business invariably distorts the kinds of news items reported, as well as the manner and emphasis in which they are reported. This occurs not as a result of conscious design but simply as a consequence of market selection: those businesses who happen to favor profits over news quality survive, while those that present a more accurate picture of the world tend to become marginalized.
Manufacturing Consent, by Herman and Chomsky
For a concrete example, check this out this article on the coverage of the genocide in East Timor.
Basically, if you let market forces totally control news media in any form, you will end up with entertainment that distributes what is popular but not what is true. It's the difference between the BBC and Fox News. Both are biased, but as far as the quality of news they provide, Fox isn't even in the same dimension.
I'm afraid it's not Google killing the news sites. It's the Internet itself. The Internet made it possible for anybody who wants to to publish cheaply and get read by a world-wide audience, and in the process killed the mere reporting of news as a paying job.
Why should I go to a news site to read a reprint of a press release from a company when I can go to that company's own Web site and read the original press release? Why should I read a news report of the latest scientific breakthrough when I can go to the scientist's own site and read his own paper on it? Why should I read the news reports of a disaster when I can go to the Twitter feeds and Livejournals of people who're actually there and read their first-hand reports, or go to the web sites of the emergency-services agencies in the area and read their updates on the situation? And in all of those cases, those first-hand sources aren't in the business of reporting news. They don't particularly care whether they get paid for generating their content, they've got other reasons of their own for wanting that content visible. And, as in so many things, the Internet's making it harder and harder for those middlemen whose business model is to get between the source of something and the eventual consumer and charge for transferring that something from the source to the destination.
Now, news sites aren't doomed. But to survive they're going to have to do something more than just report the news. They're going to have to start pulling together many sources of different information, analyzing all of it and putting together the pieces that it isn't immediately obvious fit together. Of course, that's going to be kind of hard seeing as they've spent the last decade or so wiping all traces of that out of their organizations because investigative journalism of any quality doesn't produce the Holy ROI.
100% correct. unfortunately, since the fall of the CCCP, the news industry has slowly collapsed into a sensationalistic grab bag of titillation and distraction.
Here's a nice short documentary on this by Adam Curtis.
RS
Shoes for Industry. Shoes for the Dead.
I remember reading in the Utne reader back in the 90's and editorial lauding the DOJ's attack on Microsoft that software providers should not charge for their product because it had no physical manifestation. I wondered at the time how a news magazine could make such a claim. Were they selling paper and ink? It is interesting and satisfying to see the value crisis come back around to their industry. Do you remember the movie with Ryan Phillipe saying "Human knowledge should be free!!!"? Most of us think that those who profited from Bernie Madoff's ponzi scheme should have wondered why and how they profited from so little work. But now as we read news online, listen to free music, and enjoy all the open source free software at our finger tips shouldn't we too wonder how to support the producers of our rapidly expanding information wealth? Should we assume that these increases will continue of their own accord? Or will we look back on these days as a lost golden age and wonder where all the software developers and content providers went?
I think you have no idea what real capitalists think, or perhaps don't even have the slightest clue what real capitalism is.
Wikileaks, a privately owned and operated news source, as an example of what's wrong with privately owned and operated news sources? While simultaneously being lauded for being better than privately owned news sources? Where's the punchline to this ridiculous train of thought?
Wikileaks, for lack of a better term, is private charity. Private charity is part of capitalism! Wikileaks is a capitalist outgrowth! In fact, one of the things that makes Wikileaks so special is that it specifically makes it difficult for governments (as well as corporations) to silence reporters! If Wikileaks were run by the US*, do you think it would ever publish any US government leaks?
Why it is that people refuse to associate private charity with capitalism is beyond me. Private charity is capitalism's natural way of dealing with the little segments of the economy where the profit model hasn't been figured out or is presently for some reason broken, be it quality reporting or caring for the sick or disabled.
Fact is, Wikileaks simply wouldn't exist is a society where all wealth was publicly/governmentally owned, because those in charge would eventually recognize the danger it poses to their power and "repurpose it for something more productive for the good of society."
To say that capitalism isn't solving the news problem is intellectually dishonest, at best. Wikileaks is, in and of itself, great evidence to the contrary.
*Insert any government here.