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| Shore's
Research, Commentary and Consulting Receives Prestigious
Recognition.
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The New "New News": News Companies
Wrestle with Online News Technologies |
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28 March 2005 |
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In a wave of fast and furious change news organizations are
fighting back against search engines and independent
classified services with their own services and pointed
counterattacks against perceived IP infringements. AFP
takes a swing at Google News while Gannett, Knight Ridder
and the Tribune take a stake in new search engine Topix and
CitiExpress readies a Craigslist alternative - all in one
week. It's certainly a very spirited street fight, but one
wonders whether these are blows that will have any sort of
deep impact on a news industry that won't wait for major
publishers to catch up with new aggregation patterns. The
news industry was happy to try to catch up with the "New
News" promised ten years ago; are they really ready to do
battle with the "New 'New News?'" |
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News as we
know it is moving towards what some call "the New News" at a
rate that is reminiscent of the dot-com's headiest days of
day-to-day changes.
According to USC Annenberg OJR there have seen fewer
changes than were anticipated at their first "New News"
conference ten years ago in traditional news organizations,
but that's not to say that changes have not proceeded apace
with or without them. The ability to aggregate news profitably
for audiences of all kinds is an art that has slipped into many
new hands. Webloggers link to news stories fit for their highly
targeted audiences' interests, creating hand-crafted "front
pages"; search engines such as
Topix and
Google News
grab headlines and snippets to create automated news gathering
services; and classified and ecommerce services such as
eBay and
Craigslist
provide online services that suck away much of the
bread-and-butter revenues that once underpinned newspapers'
ability to service local and specialized markets. Both
newspapers and online services may have their hardship stories
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Google News' black eye from AFP [AFP] doesn't help their
rep greatly - but the services that underpin online news
delivery are thriving as never before.
With so many new routes for news creation
and distribution that chew away at their value proposition,
many mainstream news companies are adopting additional tactics
to ward off independent competition. Thus we find in the course
of one week
Gannett, Knight Ridder and the Tribune
taking a combined majority stake in Topix [AP] and
CitiXpress, the company behind The Dallas Morning News and Fort
Worth Star-Telegram's auction partnership, launching a new
product for newspapers aimed squarely at eBay and Craigslist [Editor
& Publisher coverage]. News organizations are working
aggressively to keep their content useful and monetizable to
the widest audience possible in this "New 'New News'"
environment. But are such efforts really going to make a
difference to their bottom lines? Here are a few thoughts for
news publishers and aggregators to consider before diving into
technology acquisitions that may or may not address core
issues:
- A few new pieces will not fix an old model that's
fundamentally broken. In
The New Aggregation, it doesn't take the whole
traditional "content factory" to make a good profit in
assembling content value - just excellence in those portions
of the aggregation equation that can be used effectively by a
given online audience. While many of the new moves by news
publishers to upgrade their online offerings are constructive
efforts, the underlying assumption still remains for most of
these news organizations that you need the whole "news
factory" of the past two centuries to be a successful
publisher. As long as new content technologies such as news
search engines and classified ad services are viewed by news
publishers as improved components to be plugged into their
old business models, they're not likely to confront the need
to develop capabilities of these kinds that excel with or
without the old models surrounding them. Until then they will
continue to acquire or develop pretty good solutions that
don't ruffle too many feathers back at the home office - and
miss the meat of tomorrow's big profits in the process.
- It's all about the clients' channels. The concerns
of AFP about Google News going beyond fair use of their
content via their headlines service are not wholly without
merit - though with their own political baggage to consider.
But in the long run such battles are largely misplaced. If a
client had your newspaper sitting on the end of the driveway
along with your competitor's paper, most new publishers would
have little to say about this as a distribution issue as long
at their content was at the right place at the right time for
the right people. Yet time and again news organizations go
batty when a search engine manages to deliver clients to
their online doorsteps who are highly qualified readers of
very specific content. With near-zero distribution costs it's
more important to allow content to flow into the channels
that clients find to be the most valuable to them than trying
to re-invent traditional syndication models that may or may
not be relevant to your audiences. Effective monetization
models must take rapidly redefinable client-oriented
distribution and re-distribution as a base condition for
success.
- It's hard to fight Wal-Mart
by buying Caldor. Just as newspaper chains in the 20th
century made economies of scale for content technology
possible that local news organizations couldn't afford
easily, today's content technologies are creating new
economics for news that make changes to the "storefront" for
news inevitable. As noted in a
recent Slate article, though, those changes may mean
significant changes to operating margins enjoyed by most news
providers. As news becomes a shelf item in content "Wal-Marts"
such as major search engines that have more economic
independence to dictate terms of engagement than traditional
aggregators, it's hard to imagine that news organizations can
combine to create their own alternative news aggregation
service. It would be a little like Wal-Mart being defeated by
a regional discount store chain like Caldor (displaced by Wal-Marts
in my area not long ago). News organizations can learn a lot
by acquiring a company like Topix or developing Craigslist
alternatives, but hopefully one of the things that they learn
is that they should stop wasting time avoiding the need to
manage distribution channels that they cannot control
by conventional means.
News organizations continue to make significant strides in
re-inventing the way news is created, collected and distributed
to keep up with their clients' changing needs. But even as they
do so the content industry as a whole is changing faster. The
temptation for many of these companies will be to hold on to
existing margins and the old assumptions that drive them for as
long as possible. The sooner that the "New 'New News'" becomes
old news to companies trying to produce the best product
possible for their clients with the best technologies available
the sooner the news industry will be restored to a semblance of
health and wealth that can be sustained for years to come.
-
John Blossom
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