Monday, November 16, 2009

Darn, Why Did They Think of It First? News Media Companies Adapt to Online Value Points

I have to chuckle a bit at the recent Poynter Online email interview with Wikimedia Foundation's Jimmy Wales, in which he discusses an internal memo gleaned from Associated Press (PDF) by Nieman Journalism Lab. The AP memo, entitled "Protect, Point, Pay - An Associated Press Plan for Reclaiming News Content Online," covers a lot of ground already familiar to those following AP's efforts to put in premium packaging for news content. However, in addition to conjuring up long-standing concerns about Google and other major search engines as competitive forces, the memo also highlights AP's concern about the millions of topic-oriented pages in Wikipedia that are capturing traffic when people search for breaking news. At last the light bulb begins to go off in some minds that perhaps the issue is not so much search engines but that search engines are directing people towards the most popular destinations for specific topics. Hmm, perhaps this might have something to do with...the quality of the content that they find there?

The AP memo points out that Wikipedia articles are rich with links and structured content that drive people to other trusted information sources, a concept that the memo suggests could be adopted by the AP for its own content. As Wales points out wryly, though, "Creating authoritative canonical pages based on the latest from the AP sounds like a good idea they should have implemented years ago." In other words, after more than five years of Wikipedia building both its content and its brand as a "go-to" source for freshly updated topic-oriented content that dominates search engine results, it dawns on some folks in the news business that perhaps there's a business model in there somewhere. Layer in the growth of online portals that are aggregating links to top topics content more effectively, and one wonders just what people are going to be willing to pay for those carefully designed hNews objects that AP is hoping to use to "reclaim" the news business.

The answer to that wondering seems to come in part from a recent study on consumer attitudes towards premium news content by the Boston Group highlighted in The New York Times. The study indicates that fewer than half in the U.S. are willing to pay for news content online and that of those who would be willing to pay the preferred tariff weighs in at about $3 a month. This seems to line up with long-time assertions by Journalism Online's Gordon Crovitz, who claims that premium news sites can expect to be able to charge for about ten percent of their online content. I've noted oftentimes that a system for managing access to paid content is long overdue, but news organizations should take a hint from the payments being extracted from iPhone apps and recognize that online markets reward functionality and community input that meets personal needs more than it does deathless prose and a good network of inside contacts.

A topic-oriented Web site for news content sponsored by AP would be a good idea, but one wonders whether AP or any other news organization is up to the task of building both the content and the brand necessary to contend in search engine wars for their audience's attention. At the same time, AP's emphasis on "protective" content packaging as a means to establish fair licensing of AP content seems to miss the real revenue opportunity available to AP and other news organizations. When a publishing-enabled global audience is your most effective distribution mechanism, a strategy of "joint supplier negotiation" suggested by the AP memo is not likely to succeed.

What is needed for AP and other professional news organizations to succeed in online content licensing is a system that encourages the distribution of their content through the most efficient and popular channels available at any given moment. Instead of fighting your audience, empower and encourage your audiences to be distributors of your content - and help them to profit from it as well. Highly automated content licensing with a billing mechanism akin to mobile phone usage units - and that can help individuals to profit from AP content when it's appropriate - is the key to this concept, and should be the cornerstone of AP's premium content strategy.

With such a scheme in place, AP's members can focus on beating the competition at their own game by becoming the most effective agnostic aggregators of news content in any given market. Yes, news organizations will continue to staff up with their own editorial resources, but the news of today - and tomorrow - needs to collect the best content from whatever source that it comes from more effectively than the competition. You can have some exclusive content, to be sure, but exclusivity alone cannot power success.

This can be seen clearly in how information providers in the financial industry are required to aggregate content from as many different sources as possible to help information-hungry decision makers. Over time you may develop unique assets, but the fundamental game is giving people what they want, where they want it, when they want it. If you yell at your markets for wanting to play a different game, don't be surprised by the blank stares that you get before they go to pay attention to people who listen more effectively.

I do hope for the sake of professional news producers that AP does come up with an effective content distribution strategy, and there are some hopeful outlines in the AP memo to that effect. But the largest thing that needs to change in the AP strategy is their attitude, which still treats the Web as an object of fear and scorn. More than 1.4 billion people around the world seem to feel otherwise about electronic content, people who both consume and contribute value to the news gathering and distribution process. It's time for the AP to recognize that their mission needs to embrace those 1.4 billion people more effectively if they are to value their brand and their content enough to consider seriously the prospect of regular payments for it.
Post a Comment