News will be commoditised, comment less so, but still hard to charge for

By March 22, 2010News

My friend Paul Carr put a post up on Techcrunch yesterday which contains perhaps the best explanation I’ve seen of why the news industry has little option but to adopt a ‘free’ business model (you can find this nugget about halfway down the article):

The future of news is online, but that future brings with it the total commoditisation of facts and the death of straight reporting as a way to drive reader loyalty. Newspapers aren’t just competing with other newspapers, but also with Twitter and Facebook and blogs and thousands of other channels through which facts can be disseminated. If one paper puts its news behind a pay wall, the chances are that same news will be available elsewhere for free. Even with high quality investigative reporting, if the story is big enough then someone will simply rewrite it – perfectly legally – and post it on a blog, where it will then be reblogged and retweeted and aggregated. (The aggregators themselves encourage this: Gabe Rivera told me recently that the best way for a blogger to get content on Techmeme is to paraphrase something that previously appeared behind a pay-wall).

The battle to force people to pay for general news, then, is lost. Likewise, thanks to micro-aggregators like Techmeme and macro-aggregators like Google News, the fight to maintain reader loyalty through news reporting is finished too. Sure, some people may still cling to the BBC or the New York Times out of habit, but the trend towards decentralisation – with readers choosing their news source on a story-by-story basis – is inexorable.

The two key points here are that news stories are available to us from multiple different sources and that loyalty to news brands is declining – taken separately these are hard to argue with and taken together mean that if you want to be in the general news business finding an innovative revenue model should be high on your priority list.

On that much I agree with Paul.  Where I disagree is with his idea that columnists, comment and their ‘editorial voice’ will save newspapers from what looks like a structural decline.  I’m with him in that I believe comment columns have a very important place, and that they can’t be simply retweeted or reblogged – to get the full experience you need to read the original (as a case in point this response to Paul’s column is a million miles from replicating the experience of reading him direct – try it and see).  Where I think we differ is that I don’t think many people will buy newspapers or be loyal to one news provider’s site because they have good columnists. 

Rather, the best news sites will package high quality comment and opinion with timely presentation of the news in a free ad supported offering and then leverage their brands to generate further revenues, just as Techcrunch does with its conferences.  I’ve written about this in more detail before.

Moreover, as next generation news companies like Techcrunch and The Huffington Post gain readers they will become more attractive places for the best columnists to work, just as the traditional newspapers are becoming less attractive.  Traditional media of course had (and probably still has) the market to lose, and the strength of their brands is one of their remaining assets, but if they are to survive and prosper going forward they simply need to compete head on with their new media competitors and offer a better free news and comment service online.

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  • Hi Nic,
    Agree, but out of interest where does the FT sit with the above? Is it a freak, is it unhelpful to describe it as a newspaper etc? Or do you think the above will apply to the FT in the future?

  • There are a small number of news/comment brands that might be powerful enough to build a subscriber base – The Economist is one and the FT might be another. That will depend on the extent to which the average FT reader buys for news versus comment. My gut is that news is an important part of the value proposition and readers will balk at paying for the comment alone, but I could be wrong.

  • I disagree with Paul. Like you Nic, I believe in the new media landscape the opportunity for mainstream media has changed, but it's not over.

    We work with the top news organizations in the world and they get it. Their new role is one of content curation rather than creation.

  • Interesting. And do you think they are prepared for the content curation market to be much smaller than their current business?

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