Newspaper industry executives met this week in Chicago to figure out “Models to Monetize Content”. I like the title, but I am troubled by some of the assumed results.
As Clay Shirky has pointed out, we haven’t arrived at any proven conclusions about how the industry upheaval will shake out. But here’s my take on the current buzz:
Assumptions we’ve heard
- Newspapers can’t survive in an online world (true and false)
- Journalism can’t survive without newspapers (false)
- Advertising doesn’t work (false)
- Advertising can’t command the same revenue levels once accurate metrics are in place (true)
- Newspaper circulation was used to “prove” advertising impact (true)
- Measurement of clicks online is more accurate proof (true)
- Newspapers are dying without lucrative advertising dollars (true)
- Only newspapers can do objective, investigative, and local reporting (false)
- Readers should not expect to get this wonderful content for free (false)
- Aggregators “steal” readers away from content creators (true and false)
- Good content costs money to produce, therefore we must charge for content (false)
The fallacies and truth are intertwined in many cases but the list above is just a sampling of what we’ve heard recently in both the mainstream media and from the thought leaders in the industry.
For the items I listed as both true and false, I think an explanation is in order:
- Newspapers can’t survive in an online world (false): News organizations can survive in an online world once they establish a new business model. They may need to go through the “cleansing fire of a radical restructuring” like Bob Lutz just prescribed for GM.
- Newspapers can’t survive in an online world (true): Cutting down trees, mashing them up, and then rolling ink onto them is clearly a doomed aspect to the news industry. There is no future in the paper part of the newspaper industry.
- Aggregators “steal” readers away from content creators (true): Google and other news aggregators provide enough “overview” that many readers are satisfied with what they get from the aggregator alone and they do not progress any further. (Of course it remains a question as to how far they would have gone if the aggregator didn’t exist at all.)
- Aggregators “steal” readers away from content creators (false): Google and ethical news aggregators tease with the opening lines of a story and drive way more traffic to the content creator’s web site. It is up to the content creator to leverage the additional traffic they are getting from all over the world.
I believe that the huge infrastructure built up by traditional media companies may not be sustainable under the current advertising model. But I also believe that there are alternative business models to support a very vibrant and relevant community of journalists. Depending on how they are funded, they can be objective, investigate deeply, and tap into the local community. It is a struggle to come up with a good business model for three key reasons: there simply isn’t as much money floating around, channels to reader eyeballs are highly fragmented, and bias results from most third party “interests” paying the bills.
More pondering is clearly needed, which makes the meeting in Chicago sound great on the surface. But we simply cannot allow close-minded approaches to prevail. Here’s a quote that illustrates what I consider dangerous tunnel thinking:
It is not a natural right, but the laws of economics can’t be ignored either. Newspapers thrived because they shouldered the expense of production and distribution. Now that those costs are all but eliminated in the digital world, the content creation costs seem to be the remaining factor. But in economics cost (and even price) does not equate to value. (Breathable air is free, but highly valuable. Jewelry is expensive but of questionable value to society.) Thus some content, specialized in nature, will likely command a price. But the greatest value delivered by news organizations will be in their archivist or analysis role. Read Dan Conover’s thoughts about “informatics” being the key to this kind of added value. Still, if micropayments or other “charge the reader” schemes work… more power to those whose experiments succeed.
As an aside: I would hate to be a journalist at this time in history, but there is hope. Michelle Manafy’s column in this month’s EContent magazine outlines a few ideas about where journalists can go from here. The rise of content as a vehicle for marketers might feel like a sellout to hardcore journalists, but the more research I do into the advertising-supported model journalists have labored under for years, the more I realize that things are not as radically different as they first appear.
Just because you got something for free on a trial basis for a few years doesn’t mean they can’t (and shouldn’t) turn off the spigot.
Content costs money to make and display ads don’t pay enough.
End of story.
Prepare to pay. Why do you expect to get this for free? It’s not a natural right.