I can imagine how indignant monks who would painstakingly copy out manuscripts felt when the printing press arrived, or pamphleteers when broadsheets were brought in. publishers at the advent of soft cover books and silent film movie stars when talkies came out.
yes, as each epoch ends somebodies nose is usually out of joing. its not because the consumer or even the underlying industry is being hurt, ite because they identify with a medium and a habit and struggle to believe that there may just be a bigger market out there.
enter murdoch and freinds. you can see the extract from the speech given by Les Hilton later on (plus some of my comments in-line).
but here is the rub. people dont get news from newspapers anymore – they get it from TV. there are a host of 24 hour newschannels taht actually break (i.e. just happening now!) stories a lot. Newspapers report on yesterdays news generally or just repeat what we already found out on TV. so… did the internet kill newspapers or did the 24hour news channels?
start of speech———-
“I was invited here to talk about the value of journalism. About how we at News Corp and Dow Jones have worked to create a debate about the future of journalism in the digital world.
We have deployed some lavish language to stir things up.
We have called Google (NSDQ: GOOG) a digital vampire, and a parasite.
We have pointed the finger at the content kleptomaniacs of the internet whose business models depend on purloining the expensive journalism of mainstream media.
But now a little context. I use Google just as most of do. What it does to enhance and enrich our lives makes it a true wonder of the age.
It is true that Google is at the heart of the crisis confronting journalism today. That their almost incalculable – and growing – power warrants great vigilance.
this just does not ring true, how could a search engine create a crisis in journalism – it helps people find stories thus promotes news and information. it even allows people to fing last years news if its relevant to them (I.e. when its no longer new)
But the main, and most uncomfortable, truth is that this industry is the principal architect of its greatest difficulty today.
i think he i speaking about newspapers and not journalism. journalism is booming!
We are all allowing our journalism – billions of dollars worth of it every year – to leak onto the internet. We are surrendering our hard-earned rights to the search engines, and aggregators, and the out-and-out thieves of the digital age.
It is time to pause and recognize this – Free Costs Too Much.
free is relatively inexpensive. your business model may not support it but is that the price point or the business? many other mediums are able to deliver free news (TV, Radio) so why cant newspapers on-line?
News is a business, and we should not be ashamed to say so. It’s also a tougher business today than ever before. We have survived other perceived threats – radio, television, cable TV.
But this time it is different.
perhaps you havent survived these threats, and its all just catching up to you.TV is killing you as its a better medium for delivering news, as is the internet and even the radio. newspapers are a two century old technology 😦
How can it be that the Internet offered so much promise and so little profit? I guess a lot of newspaper people were taken in by
the game-changing gospel of the internet age. It was a new dawn, we were told. A new epoch, a new paradigm. And we just didn’t get it.
Like an over-eager middle-aged dad, desperate to look cool, we ended up dancing obediently to other people’s tunes. For a while.
You can almost hear the music – an algorithm and blues soundtrack – accompanying the harbingers of the new economy with the new rules of the new age. Their rules.
These digital visionaries tell people like me that we just don’t understand them. They talk about the wonders of the interconnected world, about the democratization of journalism. The news, they say, is viral now – that we should be grateful.
Well, I think all of us need to beware of geeks bearing gifts.
Here we are in 2009 – more viral, less profitable.
strangely enough, TV news revenues seem to be up?
News as a Share of All Station Revenues, 2007
CBS stations had the best year, just as the network did in entertainment programming. Just 7% of CBS station news directors said they showed a loss in 2007, and 62.2% said their stations turned a profit. Fox stations also tended to thrive with news. Six in 10 Fox station news directors said they made a profit in 2007, while 15% said they showed a loss. But the previous year, no Fox station news directors reported a loss, and 70% said they were making a profit. This represents a 10 percentage point drop from 2006 to 2007, and while it may reflect nothing more than a blip, it is worth watching.
NBC stations were similar to Fox affiliates. In all, 59.2% of NBC-affiliated stations reported profits. ABC stations had the toughest year: 53.8% reported profits, a four percentage point decrease from the previous year.” from journalism.org
Because news costs. Because quality costs. Because free sets the price too low. Because free isn’t sustainable. Because free is too expensive.
I read an estimate the other day by Rick Edmonds of Poynter Institute. He calculates that U.S. newspapers were a $60 billion industry in 2006, with advertising revenues around $49 billion and circulation revenue at $11 billion. This year he forecasts that advertising will plunge nearly $20 billion and circulation by $2.5 billion.
A $60 billion industry is on its way to $37 billion in three short years. At the same time, Edmonds figures, the crucial spend on journalism – on content – fell by more than $1.5 billion.
That’s a lot of jobs. A lot of articles unwritten. A lot of malfeasance unmolested. A lot of stuff no one will ever know.
if journalism is dead becuase of “free” online – why was there so little quality news before? as an experiment, take a look at a newspaper and count the number of pages that are real NEWS (i.e. sourced and confirmed by newspaper newsrooms) versus press releases, reuters feeds, international stories, sports results, movies, book reviews, opinions etc. I would hazard a guess that not very much is actually news and that the newspaper is bulking news by aggregating content. the challenge for “newspapers” online is that the best news gets the attention because search helps you choose and not the editor, so i could read a financial story from WSJ and sports from ESPN. that means WSJ is not selling me to its advertiser, and that is where the dynamics have changed, they arent selling me as a package to advertisers.
The blogosphere has an explanation, if not a justification, for what’s transpired. The world has changed utterly, they type. The mainstream media doesn’t understand it. It’s the inevitability of the Internet.
Or as Jeff Jarvis, one of the leading proponents of the information-must-be-free imperative puts it: The content economy is over.
Is it really?
good question this. is information the same as content. the WSJ would not define somebodys blog as content – but they would and so would the niche that reads their blog (even if its only their mom).
It’s been barely a decade since the Internet bubble burst on the information highway to the digital future. Ten years ago, it was taken for granted that Web sites supported by advertising were the future. Build it, and they will come. Eyeballs and advertisers. Clicks and cash.
I am not sure it was that simple even then. there was ecommerce, there was freemium and many other business models too.
We have learned a lot since then. Today, there is one thing we must agree about the content economy – the content economy that they tell us is over. That is, the one thing free news sites have in common with online newspapers … the one thing free news sites have in common with online newspapers … virtually none is making any money.
this could be because you are now selling news and not a newspaper? i.e. the “aggregation” piece that advertisers paid for before is no longer relevant
They are in good company. Even Google is struggling make money with free content on the Web – its own content, that is.
YouTube probably defined viral on the Web more than any other site. It lets anyone upload any video they like for free. Millions did and do. It is a wonder of online traffic, which is why Google paid $1.65 billion to acquire YouTube just three years ago.
Now Google needs to make a profit on this acquisition. How do you make money on YouTube? It is supposed to come from advertising. But as it turns out, not enough companies wanted to put their advertising alongside home videos of pet dogs having baths, or kids doing karaoke in their bedrooms. So YouTube – Google – is resorting to paying millions for quality, professional content in an effort to lure the advertisers they need.
That makes one wonder just how long it will be before YouTube asks its viewers to start paying up.
Free costs too much.
this is pretty flawed logic on a number of levels:
1. wait 5 years and see what happens to you-tube, newspapers just have a different investment time horizon
2. news is hard to monetise as you cannot effectively predict traffic – i.e. a big story creates a spike, if you dont have the sales lined up, you cannot monetize it. Youtube has a similiar issue. not knowing what you are selling means you have to charge less
3.free is cheap, not doing what you are meant to be doing well, well ,is expensive.
Even advertisers, who once cared above all about clicks and page impressions, are starting to become more discriminating. More and more, they want to reach quality audiences to burnish the image of their brands.
A few months ago a study called “The Silent Click” by Comscore (NSDQ: SCOR) and the Online Publishers Association (OPA) reinforced the reluctance of brand marketers to rely on click based metrics. It found that eighty percent of display ad clicks came from only sixteen percent of internet users.
Furthermore, these obsessive clickers are predominantly younger and lower paid than most web users.
Two weeks ago the Internet Advertising Bureau and Bain & Company released a study called “Building Brands Online.”
This report highlights the disconnect between what brand marketers are now asking for in terms of quality measurement on the Web—brand awareness, purchase intent, favorability—versus what online publishers have traditionally been providing them—click-thrus, unique visitors, ad impressions.
So, ironically, what they now want is more of the ‘old media’ metrics they are used to getting from print and television.
In other words, they are looking for intelligent, quality journalism.
many advertisers for many brands look for different things… clickthroughs have become a bit of a red herring and cost per acquisition is what clients will eventually want to monitor.
Obviously this is all great for the Wall Street Journal Digital Network. It supports what we have been saying all along; that audiences exposed to display advertising on high-quality content sites are more engaged, more favorable towards a brand, and are more likely to spend.
We are seeing evidence of this every day. For instance, our homepage buyouts on WSJ.com have sold out for the last two months.
We can take heart that high-quality content can break out from the pack and earn the highest online advertising rates.
This is encouraging, but we know that advertising will never be enough. We need the primary customer to pay as well. Leaving the fate of our business in large degree to the cyclical economics of advertising is too dangerous.
so are you saying that it is the cyclical nature of advertising now that is the problem? i thought it was the internet…
In the digital world, constant innovation, product development and investment is needed to keep pace with the competition and serve our loyal customers.
if one compares the innovation brought to bear by google in the last 5 years vs newspapers in a landscape that is definately innovation heavy:
google: gmail (huge storage), orkut, wiki, checkout, webmaster tools, adsense for RSS, youtube, music search,wave, docs, android, maps etc
newspapers: a new website (maybe)
which one would you bet on winning?
It’s not as if there’s no precedent for charging for content online. In the U.S., online content from Major League Baseball and Consumer Reports have attracted large paying audiences.
Quality journalism is for sale too.
The Dow Jones’s flagship – The Wall Street Journal—has up to now – been the one major U.S. newspaper charging for content online.
At the same time it has been the one major newspaper that has been able to grow circulation and circulation revenue.
The Journal this year became the top-selling – selling – newspaper in the United States. And it did it by selling more subscriptions in print and online. It did it while garnering more individual subscriptions. It did it while charging more for those subscriptions.
If you are not finding new readers willing to pay, maybe it should come as no surprise. Newspapers available for free on the Web surely are making consumers an offer they can’t refuse.
Now if you believe the bloggers, that is what newspapers should do. They should price their content at zero because the content isn’t what’s valued. The theory is it’s the links to the content that give value, and the advertising they bring.
sounds like what was happening before as less than 20% of revenue was cover price anyway and most of the costs are associated with physical distribution and not with collecting news.
But who will buy all this advertising?clients, unsold inventory, affiliates – get creative?? Who is going to underwrite the cost of this content? maybe thats the cost of business?
Let’s not forget the basic economics: The rates on our ad cards increase when there is less competition, not more.
i.e. you can charge more in a monopoly or oligopoly as its harder to reach the audience – the easier it is to reach the audience, the lower your rate. i think they call it competition?
There is something else fundamental at work here.
Implicit in the false gospel of the Web is the faith that free is superior. And those who dare think otherwise are heretics and fools.
Charging for online news, they say, is unfair. By asking us to pay, newspapers are depriving readers of something they need and should have. Deserve, even.
But neither the newsstand nor the Web is a lending library. Even Google has conceded it can’t just reprint every book without due consideration to publishers and copyright owners. Why should journalism be different?
i completely agree, there is a copyright issue around real news. but before you trumpet this around, google can just buy a feed from reuters if it wants? or plenty of other organizations will provide a news feed too. we once again come to the issue that today’s newspapers dont sell news – they are aggregators that use news to deliver a packet of information (like comic strips) and they sell a whole package to advertisers.
The book business hasn’t surrendered its copyrights. The music business may have struggled for a time with the issue, but it hasn’t surrendered either. Neither has television or movies. Why should we?
Let’s face facts. A business model that assumes we can’t charge for the content we produce assumes that our content has no value in the online market. In pure economic terms, such a business model has to mean one of two things: Either there is no demand for the content or there are substitute supplies of that content sufficient to drive the price almost to zero.
I don’t believe it. And I doubt you do either.
i believe it!
It seems rather naïve then – stupid, even – that so many newspapers would be so self-deprecating. That is the logical conclusion, after all, if we place zero value on the content – the news – which is our product.
Newspapers, particularly in the United States, have historically undersold themselves to their readers. Much as the blogosphere advocates today, newspapers in the 20th Century sacrificed circulation revenue for circulation volume in a quest for higher-margin advertising revenue.
Can’t say it didn’t work for a time. But look where it’s left us…
At the Journal, we put elements of our publication outside the paid wall as a way to attract traffic and potential subscribers. The compelling proposition, however, is that the content that differentiates the Journal isn’t free. You want the Journal’s global scope, you want news, you want analysis and commentary – print or online – you pay. sounds great to me!
The Journal has more than 2 million paying subscribers – and among them, more than a million who pay to take the newspaper digitally. so let me get this staight, you have a great freemium model with MORE people subscribing digitally than those who actually BUY The newspaper. Just how is the internet hurting your business again?
Why is it that paying for content in 2009 strikes some as such an outrageous proposition? it doesnt though, freemium is a well accepted model. however i dont believe that people will pay for the “whole package” and that is the economic issue for newspapers…
Many of us here today are old enough to remember when television was free. Well, it isn’t any more.
Just check your cable and satellite bills.
Even radio – omnipresent and forever free, right? In the U.S., nearly 20 million subscribers pay for radio from Sirius (NSDQ: SIRI), the satellite radio operation. HBO built a name and a business entirely by persuading people to pay extra for content on television. SKY, Star – millions of consumers are willing to pay for content they want and value.
There are other examples from the Journal. The Journal now charges for news via online devices like I-Phone and Blackberry and the emerging e-readers like Amazon’s Kindle. Already we can see that these new platforms will deliver millions in revenue. once again, all going well for you – so what is the problem?
For Dow Jones charging for content is a vertical proposition that assimilates the disparate needs of disparate audiences.
Our news has several lives and several levels of value. A company’s earnings report is instantaneously rendered as news by Dow Jones Newswires.
In a fraction of a blink of an eye, its first iteration is transmitted as algorithmic code to be recognized by Wall Street computers programmed to interpret and perhaps act.
That same headline goes at the same time to trading desks for subtler analysis. For this content, the price is handsome.
Next, the news is on The Wall Street Journal Web site. A reader pays up to $149 a year for that. Or maybe he will take it instead via I-Phone or Blackberry; that costs $100 a year. A reader using an e-reader pays $180 a year for the news. And in tomorrow’s print edition, the price – the value, if you will – is $350 a year. In archival form in Factiva, more value will be delivered for years to come. yikes, sending out company’s financials is not news!! its republishing – i think that is a very dangerous place to be as its only a matter of time before exchanges or even companies will be able to publish their own results via investor subscriptions.
At the same time as we navigate our way into the digital future, everyone here knows that the newspaper business must rationalize the lingering inefficiencies which inhibit our industry.
Chief among those is the excess printing capacity which weighs us down. Behind the journalism, newspapers are of course huge manufacturing and distribution operations. So many of our plants sit idle much of the day – or worse, much of the night. The ROI on idle, the return on our investment, costs too much.
The Journal is reducing its cost base significantly by tapping that excess capacity. Contracting with printers in locations around the U.S., we not only reduce the cost of production, we cut the cost of transportation.
Our production team also is on the other side of the rationalization equation. Our own excess capacity was put to work to print another newspaper. In this case, someone else’s efficiency is our revenue.
Not so long ago – in America at least – this kind of co-dependence was unheard of. Newspaper companies were self-contained, relying entirely on their own staff and their own facilities.
Today newspapers are sharing delivery trucks. Outsourcing customer service operations. Consolidating regional news functions. These trends will accelerate – and they should.
Watch for the Internet to be yet another inflection point in this regard. There is no reason why newspapers should build unique content- and payment-management systems on the Web.
Might as well build more printing plants…agree with that, especially if you dont have a disruptive idea
The lesson we should take from the Internet revolution isn’t that free is final. It’s not that trust and authority are unwelcome.
The lesson is that new efficiencies are possible. It is possible to re-conceive our business in a less costly context. It is possible to sell differentiated content to familiar audiences and extended ones.
What makes sense for newspapers is to consolidate Web commerce functions. As a pioneer in online news payments, Dow Jones already has such a platform. When we rebuilt it recently, we added the capability to allow other newspapers to share our expertise. and now the sales pitch!
Unique content wins unique users; unique facilities don’t. geez, i guess facebook and twitter have it all wrong 🙂 platforms dont make a difference ….
I don’t know when newspapers will no longer be characterized by the paper on which they are printed. I do know most of us in this room charge for content on paper and still collect a tidy sum in the process. Most of us still collect enough to continue to produce quality news and still produce a profit.
Eric Schmidt, Google chief executive, said recently about the debate on free versus paid:
As long as you’re on the side of the consumer, you’re pretty much on the right side of all these debates.
No doubt he is right. The consumer will determine the business. Consumers will seek the valuable over the vapid because they always do.
They subscribe to HBO and SKY when broadcast television and, indeed, YouTube, is free. They will continue subscribing to newspapers if the newspapers provide the value they seek.
Barney Kilgore, the inestimable former editor of the Journal and CEO of Dow Jones, said something we ought to remember in this time of transition.
The man who would create the first national newspaper in the U.S. and redefine journalism in the process said a long time ago:
The fish market wraps fish in paper. We wrap news in paper. The content is what counts, not the wrapper.
We can only wonder how things might have been different today had other newspapers done as the Journal did in 1996 and set a fair price for content online. We can only wonder what we would be talking about here today had newspapers recognized the import a decade ago of the bursting of the Internet bubble.
There isn’t enough advertising to support every online aspiration. Now we must regret the stories not covered because we didn’t demand what we truly were due.
And yet this remains an age of great promise for what we do.
Only a few hours ago in Washington DC, Rupert Murdoch, the chief executive of News Corporation and my boss, told the U.S. Federal Trade Commission:
…We now have the means to reach billions of people who until now have had no honest or independent sources of the information they need to rise in society, hold their governments accountable, and pursue their needs and dreams.
… The future of journalism belongs to the bold, and the companies that prosper will be those that find new and better ways to meet the needs of their viewers, listeners, and readers. And they should fail, just as a restaurant that offers meals no one wants to eat or a car-maker who makes cars no one wants to buy should fail.
And he went on:
In the future good journalism will depend on the ability of a news organization to attract customers by providing news and information they are willing to pay for.
Free costs too much. Good content is valuable. That hasn’t changed. It never will. The question is who will provide the content and who will be compensated fairly for the value delivered.”
here, here – good content is valuable. good content is created by great journalists. great journalists can earn more money self-publishing on line and selling their ads via networks than they can working for a paper. newspapers dont control great content, content is relevant to the reader. free is not the issue, paid is not the issue. newspapers are old and dying medium based on delivering very little value and a whole lot of vapid 😦