The Future Of News Is Scarcity
Nic Brisbourne is a partner at European venture capital firm DFJ Esprit, investing in software and media. He was previously an associate with Reuters (NYSE: TRI) Venture Capital and an executive at Cazenove Private Equity. He blogs at The Equity Kicker…
News Corp (NYSE: NWS). and other traditional news businesses are hand-wringing over how they will make money on the internet. I think they are focusing on the wrong problem.
The web is more than just a new medium. Rather than thinking about how they can sell the same old news via a new channel, media bosses should be taking this opportunity to re-examine old assumptions, to rebuild their product for the 21st Century.
The interesting thing about the news industry is that, when we examine it from the ground up, we quickly realise that it lost touch with its customers a long time ago, and that the model for the future will most likely look very different to what we are used to.
The great tragedy of the newspaper industry in the late 20th Century was that, in the pursuit of profit, quality journalism became a dying art. Budgets were reduced, journalists were asked to write more stories per day and were given less time to check facts. At the same time, editors were instructed to avoid stories that might create controversy and the expense of lawsuits. The result was more and more bland articles recycled from paper to paper, more politically motivated editing and the collapse of public trust in the newspaper industry. This story is chronicled in Flat Earth News by Nick Davies.
We kept buying, though, because we didn
Great article! You have hit the nail on the head.
The saddest thing about the collapse of the newspaper industry is that it should never have happened. The publishing companies have all the skills and knowledge they need to be successful online, they have just failed miserably to make the transition.
If you look in any successful newspaper, like the UK's Sunday Times, there are many ways they make money from their loyal audience – display ads, classifieds, directories, jobs, affiliate promotions for insurance and holidays, own brand books, back issues, stock photos and events. Yet when they move online this knowledge of how to monetise an audience seems to disappear. They immediately get into the polarized debate between free with ads or paid subscription.
As you rightly say the successful publishers will be those who attract their customers with freemium content, build a relationship through interaction and community and then monetise their loyal audience in multiple ways.
Their future should be extremely exciting for the publishing industry but I fear most will fail before they wake up to the huge opportunity the web offers them.
You can’t generalise. Certainly it’s clear that newspapers did not have anyhting like the engagement with readers that they were presumed to have. So when a user-centric information choice emerged, they were beached. Yet there are still great newspapers (NYT being one) that have been consistent and relentless in their focus. They should not have a problem charging (in fact I’d argue they are too timid on that score). But they should also embrace the medium and really go for it. (I want NYT mini-documentaries and interview tapes and so much else that they’re not yet really onto.
Yet it’s also true that the syndications that reduced so many big regional newspapers to empty shells so as to maintain heir fabulous profit margins were already dead when the web came along. They needed only a light breeze to blow them down.