The future of news
Someone somewhere always wants to know about what is going on down the street or a street across the globe. Back before Yahoo! and Google there was no easy way to find sources of local news, so in 1994 I started compiling lists of internet links to free local news media sites from all over the world and sorted them by city. This later became the www.HomeTownFreePress.com website. I keep the site alive in part for reasons of nostalgia, but also because it still generates advertising revenue including ironically, ads from Google.
When Rupert Murdoch first got into the newspaper business, conventional business wisdom held that to be competitive in the marketplace, what you offered had to be Good (quality) Fast (speed to market) or Cheap (price): pick ONE since no company could hope to compete on more than one metric at the same time. This evolved into pick TWO, and later, pick THREE. Then along came the internet and changed all that to Perfect, Now and Free. How does any business compete against THAT trifecta?
The dot-com bubble was the result of internet companies failing to find profitability in offering something that was Perfect, Now and Free. Wikipedia has recently started passing the hat while trying to survive and Craig’s List still seems to remain content just building market share.
Google’s business model is also Perfect, Now and Free but they figured out how to make a buck (or a few cents) by partnering with anyone and everyone willing to share the attention span of their online search visitors. Looking for a restaurant? Find an ad link to Pizza Hut. Looking for information about global warming? Find a link to the Wall Street Journal. Each click makes Google something, however small, multiplied by billions of clicks.
Traditional newspapers have one foot on the dock and one foot on the boat trying to get from print to online, and the gap is widening. Major metropolitan newspapers have enjoyed near monopoly status for years because they are highly capital-intensive, industrial-age enterprises. First you have the start-up costs of buildings, and presses; then you have the variable costs of paper and ink, and finally you have the fixed overhead costs of utilities, maintenance, delivery and employees. It is this last element that is the giant killer. If a newspaper has only one subscriber in each neighborhood or a thousand, the costs of keeping the doors open, the news written, printed and delivered remain fixed. A newspaper will cease to be profitable long before subscriptions drop to zero.
An internet news business however has almost all variable costs. A single talented journalist with low-cost internet access and something interesting to say can have a world-wide audience exceeding the print circulation of the Wall Street Journal. The ease of adding hundreds more writers to an online news business is matched only by the ease of cutting back to only one, if necessary.
I REALLY like reading the print version of newspapers but I also REALLY like being able to read every other newspaper online when I want or need to. Free is good, but I too understand and appreciate that nothing good in life is truly free. Artists, writers, photographers and even editors need to get paid if we expect them to continue to provide us with the fruits of their labor. What I don’t want to do is to have to subscribe to every media source in the world in order to enjoy what I enjoy now for free. What to do?
Advertisers pay Google each time someone clicks through from Google to their website. Why, because the advertiser hopes to sell them something as a result of them coming to their site. Google now lets their valuable online visitors click through to newspaper websites for FREE; gratis, no charge to the newspaper. Have you ever seen a newspaper website WITHOUT advertising? When a newspaper website visitor clicks through on those online ads, the newspaper gets paid by the advertiser.
Rupert Murdoch grouses about Google not paying the Wall Street Journal for their content when Google doesn’t even have their content anyway. It is newspapers like the Wall Street Journal who have the potential to benefit the most from Google sending over visitors to them. The problem for most online newspaper however is that they have the same one-size-fits-all approach to online advertising as they have with their print advertising: the advertiser that pays the most gets the best position and the ads are sent to EVERYONE regardless of their interest.
I can’t tell you how many sports sections I have thrown in the recycling bin in a lifetime of subscribing to newspapers. I don’t read the sport section and by extension I don’t read the ads printed in the sports section. My hometown newspaper has NEVER cared what I like to read and then send me just that. By extension, they have never cared about who their advertisers’ print ads reached because they couldn’t deliver it that way even if they knew what we wanted.
Newspaper websites function the same way. They put in my face whatever ads they think will make them the most money, not ads in which I might necessarily be interested. Google on the other hand goes to considerable effort to anticipate what interests me and serves to me those ads most likely to solicit a click through from me.
I would be happy to pay Google one subscription fee in order to get access to the full versions of all the news articles they now give me free as condensed versions, if that is what it took. Google could sign up every newspaper in the world to share that subscription fee in exchange for all their news articles. But then, Google would get ALL the web traffic and all the online advertising revenue.
Google says it is not interested in being in the content creation business, but I think it might be inevitable. Newspapers are not learning how to profit from their online content. Once print newspapers can no longer afford their writing staff, and we are already seeing layoffs at many newspapers, Google could hire those now unemployed journalists from around the world along with a few good editors to create a whole new genre of news vehicle. Who knows, Google might even figure out how to pay journalists at the neighborhood level for stories that might hold the interest of only a few score readers.
The internet has the potential to enable everyone to become both creators and consumers of news; it just takes someone to organize all that information, deliver it on demand and make a reasonable profit in the process.
Anyone giving odds; Wall Street Journal vs. Google?
<IMHO> Fred Jacobsen