Beyond the parasitic news model (and why Kindle won’t save us either)

So it’s 2009 and the search for a sustainable online newspaper business continues.

Even Google hasn’t quite worked out how traditional newspapers safely navigate past the Rusbridger Cross to emerge as businesses that generates most of their revenue from online operations.

The problem: print commands much higher premiums for advertising then the web does.

In order to compensate for that, web businesses either need to significantly scale up output, or significantly cut back on costs.

Currently one common solution espoused by those immersed in online business is to find someone else to worry about most of the costs for you.

The thinking is thus: the web is already awash with stories produced by other news orgainsations and these can be used as a free resource.

With a bit of repurposing and organising by a small team of copy editors, stories can be presented as an entirely new, high-volume, comprehensive news service.

It’s a smart model – one that could also disrupt the many news aggregation subscription services that exist.

You could also argue that, by combining stories from many sources, better organising them or by integrating social media, these news businesses are occupying a space that could/should have been filled by newspapers a long time ago.

But I still can’t see how their businesses can be sustainable in the long term. By relying on the mainstream media to produce their information in the first place,  they are tying themselves into the very business model they claim to be replacing.

If the mainstream media fails, these new businesses fail with it.

Mainstream media provides a volume of news online that is yet to have an equivalent.

I know it’s not a popular argument to make, but I’m afraid no other online content (as it currently stands) will cut it as a replacement. (If you don’t believe me, ask Eric Schmidt.)

Think about it: how many websites would you have to trawl through a day to find as many celebrity gossip stories as you would get from the combined feeds of The Sun, The Daily Star and The Mirror?

More scarily, how many websites would you have to trawl through a day to find an equivalent volume of quality business news that you get from The Financial Times feed?

An alternative theory is that the news industry needs to learn from the music industry and to replicate  iTunes or create some other form of paid-for model.

I’m not so sure that works either.

I agree that there is much we can learn from the music industry (that lawsuits and protectionist attitudes won’t save you – for example),  but I think there are also very distinct differences.

For example, when consumers download music off the internet for free, they pretty much know they are doing it illegally. The large record companies are not putting out their content for free on their own websites and there is no official Google Music.

We also do not have a market where consumers understand they have to invest in electronic devices for the purpose of accessing print content. This, in my opinion, is why the Amazon Kindle is unlikely to be the answer to the newspaper industry’s woes.

Perhaps a more fruitful investigation would be into developing paid-for products and services that reuse content or closely ally to the media brand.

8 thoughts on “Beyond the parasitic news model (and why Kindle won’t save us either)

  1. Cable television. If I am paying my telephone/cable/satellite service £N/month, and they deliver diverse content within that fee, it stands to reason that news media could support themselves via any of those channels. Isn’t this the way it works already?

    If web advertisers were paying fees to ISPs instead of individual websites you’d have an alternative revenue for the ISPs to support news delivery at no cost to the consumer.

    How would you get this model adopted?

  2. Hi dp,

    Interesting idea. I see what you’re getting at, as tying the content with the distribution method has been the traditional way for media to make money.

    However, I think perhaps an ISP developing an Internet-wide advertising delivery system may not be the answer.

    It may be that I misunderstand what you’re suggesting, but I’m stumped as to how it might be practically achieved.

  3. Thanks for the post, it’s a thought provoking area. It got me thinking about newspapers, their role in society, relation to business, and how it’s all a bit mad at the moment.

    Blogging etc has lots in common with (the ideals of) journalism. It represents a collection of varying views, all of which are (fundamentally) subjective and have different contexts. It ties in with real issues that matter to the individual, and to which some people can relate. And it is fearless and challenging and brave.

    The ‘commoditisation’ of journalism has a long history, from since 1896 with the arrival of the Daily Mail and the reliance on advertising income for newspaper publication. From this point on, what constituted news was influenced by the concept of a market that, as industrialisation demanded, was homogenised and defined by those in power.

    For example, a Woman section (lazy example, there could be others) would have articles about health, beauty etc – these are things that this market segment were to be interested in, and the journalist absorbs these ideals into what constitutes objectivity (a problematic concept) on behalf of their audience.

    Citizen journalists (in principle) challenge this concept by realigning the conversation, and highlighting the variety of views that exist.

    The challenge for newspapers/journalism is to identify what they do and what constitutes value – and dismantle a century of commercialism (although it is doing a good job of dismantling itself).

    And if that means the reporter becoming a blogger, is that a bad thing? If you are retelling the conversation, passing on decisions that affect people, and campaigning on their behalf, then isn’t this OK? If it adds value…?

    Or if it means a complete upheaval for newspaper publishing, with regional replaced with local, passing on valued information, and engaging with the community, would that be a bad thing?

    And let’s not forget the marketing concept of how to react to challenging conditions – identify your niche and realign your business. It’s been the advice to UK manufacturing for a while.

    Perhaps newspapers need to do the same, get back to basics of reporting on the conversation for the dispossessed majority and telling truth to power. Not everyone has access to the web, or the disposition to read online – are these the niches to target?

    As for a business model, newspapers can deliver real value if they engage in the (on and offline) conversation and use their privileged position for the power of good. They are of the people and there will always be an income stream for such channels to market. But it means being brave in the face of commercial opposition. Some papers are doing this well, I would add.

    Rambling on now, would be interested to hear your views.

  4. I find Rob Benson’s comments very interesting, especially where he writes about regional being replaced with local, passing on valued information and engaging with the community, and the reporter becoming a blogger.

    This is exactly how I started in journalism, so maybe what we are seeing is local and regional newspapers coming full circle with the advantage of interactive technology. I used to write a weekly column, which was essentially a blog before the internet was dreamt of. Within the limits of technology at the time, we did engage in conversation and used our privileged position for good (and won a prestigious award as a result). I think that finding that role for local and regional newspapers is now even easier, but only if the people involved understand and master the technology.

    I think the key is to be reliable and trustworthy and to give away as much as is financially viable. The more you give free, the more people will come back, and that means you can foster real relationships with your audience. And the more you allow your audience to engage with you, and give them a voice, the more you remain relevant to them. It may seem obvious, but it’s amazing how many publications get it wrong, especially on the digital side, where audience expectations for interactivity are even greater.

    There is no magic solution and each publication will need to look at their audience, their purpose and resources. But I truly believe that all media are complementary, and just as TV didn’t do for radio, so the internet won’t spell the end of newspapers.

    It really comes down to the fundamental of journalism – know your audience and know your medium. Any newspaper that does will survive.

  5. Nice ramble Rob, I especially like the idea of “Perhaps newspapers need to do the same, get back to basics of reporting on the conversation for the dispossessed majority and telling truth to power. Not everyone has access to the web, or the disposition to read online – are these the niches to target?”

    Increasingly though I’ve been thinking about what is the point of all this journalism. Less and less of it is required to give people access to information, certainly as the web because more universal and digital media skills improve.

    I think that publicly funded media needs to come up with a much clearer answer to the question of how does that money advance public good. That in turn challenges notions of impartiality. Why, I’m wondering, isn’t the BBC increasingly expected to work to improve the places they serve, rather than simply reflect them. After all communications money that is spent by the police press office is partly intended to be used to make people safer. Why are their different rules for public money spent on communication through the BBC? (I understand why their used to be different rules – but how much longer can we justify that)

    This of course could be a way into earning money for all sorts of media – do something which people will value because it makes their world tangibly better.

  6. My own recent experience is that video news releases are complementing written ones on media office web sites. These services have to be paid for by media relations teams and can be expensive. But of course journalists, increasingly targeted in several interactive forms from several angles, don’t have to pay.

    So we come to the thorny issue of subscription fees for the supply of ‘advanced’ content, and when that arises the journalist looks at their budget, remembers their licence fee and slopes off to look at the BBC.

    That or they remain comfortable in the knowledge that multiple sources will hand them their stories pre-packed, so to speak, in a multiple of ways. But then no-one offers anything different to another.

    Blogging is an answer, as it offers scope for free interpretation, but gets to be a problem when opinion takes precedence over fact. Can a news story be blogged if it doesn’t come with an opinion to make it different? We come full circle to the old-fashioned contacts book in that case… it’s just making the effort to make the most of them and engage in some good old digging!

  7. It’s also possible that there is no way around the problem and we have to accept that we’re moving into a new era of journalism.

    We’ve had the coffee house era, the pamphlet era, the newspaper era and maybe now we’re moving into the social era – almost back to the idea of news spreading in coffee houses – but in this case from individual bloggers talking directly about their own story.

    Instead of several newspapers employing journalists to tell stories and spread news – we’re moving to a time when people tell their own stories in their own space and those stories are in turn spread by search engines and aggregators.

    Each blogger, twitterer, podcaster or even message board contributor could make small amounts of revenue from their story in their space – others could make slightly larger amounts of money by sharing the stories of others in their space.

    But it’s all much more social, much more democratic and on a much larger scale globally but smaller scale in terms of where the stories are held and produced.

    Local newspapers could still exist as papers of record – possibly on a public service model – reporting on local politics and big issues in each area – maybe part funded by advertising and part funded by a ‘local media tax’.

    Just an idea

  8. An interesting post, Joanna. I develop online products for a newspaper company … and the questions you pose are relevant, particularly so when considering advertisers incredible bias toward the print media advertising.

    I’m not sure that comparing the products (and therefore revenue streams) of the newspaper and music industries is helpful.

    Music endures, can be replayed. The purchase has residual value.

    News on the other hand, has a very limited shelf life … and then new news is needed. Newspapers have news value for (at most) a couple of days. News is a service, not a product. (You refered to this in your last post )

    Now people do pay for services, all the time … but the criteria used to determine the value of services is different from that used for concrete products.

    Quality, timeliness, availability and delivery, relevance to context, and efficacy become differentiating factors.

    The newspaper business is actually the business of _delivering_ news … journalism and news are not tied to this or any other particular form of delivery service.

    The need for news/information delivery services has not diminished. But how we make a profit off delivering news and information needs to change.

    The old service (newspapers) are falling out of favour with consumers. Media companies make the mistake of thinking the old format can just be stuffed into a new medium.

    The service needs to be revisited:
    – What do people need in a news/information service?
    – What will people pay for? Alerts? Local relevance?
    – How do they want to consume the news? In a lump? Drip fed? Everything? Only what’s relevant to them? Electronically? In some physical form?
    – Where do they want the news? At home? In the office? On the move?

    It interests me that some people will pay for breaking news updates to their mobile phones…

    So many questions. So few real answers. But at least the questions are being discussed.

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