Tony Wright

People are upset about the news industry dying/changing, and with good reason. There’s a lot of great history and romance in journalism, and it’ll be a shame to see them go. There’s a great summary of the issue by Nick Carr and some good thoughts (with a linkbait title) by Scott Karp. Karp says:

Those who argue that Google is a friend to content owners because it sends them traffic overlook the basic law of supply and demand. The value of “traffic” is entirely relative. The more content there is on the web, the less value that content has — because of the surfeit of ad inventory and abundance of free alternatives to paid content — and thus the less value “traffic” has.

He’s right that it’s a supply and demand issue, but he’s wrong that Google isn’t a friend. Newspapers got to be a VERY fat business with a huge expense line because there was a limit of supply. You want written news in your hometown? You’ve got one choice, maybe two if you’re lucky. You want to advertise to people who care about the news? Same choices.

Over the past 50 years, reporting the news SHOULD have gotten cheaper. A flood of journalism grads, word processing and desktop publishing tools, increasingly sophisticated global communication, and cheap syndicate-able news stories when it’s not practical to report it. Over the past 20 years, you’d think it’d have gotten cheaper yet. Why have a press at all? When a story is breaking in Istanbul, why not just find a freelance reporter there rather than fly one of yours over and put ‘em up in a hotel? Need to do some fact checking? Try the internet. Don”t have time to write a deeper article? Link to some content partners in a “learn more” section at the end of your article. Looking around at content startups (like TechCrunch), it’s easy to see imagine cheaply you could run a newspaper. But modern newspapers don’t have that imagination, and if they did they don’t have the agility to get there with huge debt service, huge staffs, and big infrastructure to support distributing dead trees and ink.

The problem with the industry isn’t that Google owns the middleman slot. The problem is that the news industry as we know it is fundamentally inefficient. There were local walls around the supply, and little fiefdoms of news grew fat and happy (and horribly inefficient) inside these walls. Now that innovation has removed those walls, an oversupply of news has spilled into the world and the girth of these news organizations just can’t be supported. This doesn’t mean we should pour the hate on innovation.

Technology innovation is often about making markets smaller/more efficient. It’s taking something that used to cost $50 and making it available for $5, which tends to make innovators rich and incumbents flounder and die. It’s about making music sharing cheap and easy so record-labels can’t get drunk off of the insane profits they’ve been enjoying. It’s about sites like Kayak and Faracast making the market for airline tickets more efficient and less inscrutable.

Google *IS* a friend to the news business. They are giving them a free/huge distribution channel that they don’t have to pay for. There are plenty of small/nimble news startups from the Huffington Post to the West Seattle Blog (my neighborhood rag) that are happily growing and collecting advertising revenue.

There’s clearly a need/demand for news and a clear path to making money with content on the Internet. There’s not much we can do but sit back and watch most of the dinosaurs die, rot or evolve, and watch the nimble little mammals grow up to fill the niches they leave behind.

http://www.suziorman.info/ suzi orman

The problem with the industry is not that Google owns the middleman slot. The problem is that the news industry as we know it is fundamentally inefficient. There were local walls around the supply, and little fiefdoms of news grew fat and happy inside these walls. Now that innovation has removed those walls, an oversupply of news has spilled into the world and the girth of these news organizations just canot be supported.
http://westseattleblog.com Tracy at WSB

Fat, happy, and inefficient is a great way to describe The Old Way. I can attest from having been part of it. Six figures to sit in an office and boss people around, till I walked out of old media 16 months ago. I directly produced content when people were sick or quit abruptly, but otherwise, mine was a job they really didn't need to have around. And in my gut I knew I wasn't doing something that really mattered.

But the clearest view of the fatness/inefficiency came in summer 2006, when Tribune (owner of my last old-media employer, a tv station here in Seattle) sent me to a leadership conference of some sort at its West Coast fort, the LA Times. I shared tables with nice people whose name tags were crowded with long, granular titles like “Co-director of revenue analysis management audits for Orange County classified ads that start with the letter A and end with the letter C but never at dusk.”

It was overkill that they spent maybe a thousand bucks on airfare and hotel to send me down there in the first place, when the information I received could have been distributed via webinar or even e-mailed PPT. Saw the same thing working for Disney at the turn of the millennium, when I was flown from Seattle to San Jose almost weekly for a while, just for the day, to participate in meetings that could have been dial-in. And I was nothing/no one special, so imagine that kind of financial inefficiency multiplied by thousands, in so many different ways.

Ultimately the plug was pulled on the Disney project I was on, after it lost a billion dollars. 400 of us lost our jobs. So I wince in reminiscence as I see what's happening with the newspaper folks now.
http://none.com Dan

I agree, media is mostly inefficient. I disagree, however, that it's desirable for a news organization to link “Learn More” to some co-opted elance content. I disagree that it's a good idea to just hire someone over the internet to write the story.

The few people that still do pay the news organizations for their content largely do so due to a perception of quality. When I read something crazy on somebody's blog, I always go back and check the Economist or the NYT to see if it's true. I value the fact that they actually did fly somebody over, had them investigate, etc. It's important.

So yes, they're bloated – but it's not all fat, there's muscle there too.
http://none.com Dan

I agree, media is mostly inefficient. I disagree, however, that it's desirable for a news organization to link “Learn More” to some co-opted elance content. I disagree that it's a good idea to just hire someone over the internet to write the story.

The few people that still do pay the news organizations for their content largely do so due to a perception of quality. When I read something crazy on somebody's blog, I always go back and check the Economist or the NYT to see if it's true. I value the fact that they actually did fly somebody over, had them investigate, etc. It's important.

So yes, they're bloated – but it's not all fat, there's muscle there too.

Google is a friend to the news business (but it’s got to evolve)

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