Eric Schmidt Tells Newspapers: Create Products People Want And Advertising Is The Future

Google CEO Eric Schmidt delivered the keynote address to the Newspaper Association of America in San Diego Tuesday.

The AP writes that Schmidt assured news organizations that advertising is the way of the future:

SAN DIEGO — Google's CEO Eric Schmidt recommends that news organizations continue to rely on advertising but seek new ways to reach readers.

Without providing specific recipes, Schmidt's speech Tuesday lays out a few possibilities.

One is a site for medicine similar to the online encyclopedia Wikipedia, which lets users collectively contribute and edit entries.

He says there's still room for subscription and pay-by-the-piece journalism but he emphasizes advertising, the source of 98 percent of Google Inc.'s revenue.

Schmidt makes the remarks at the Newspaper Association of America convention in San Diego.

Schmidt commends newspapers for staking a claim on the Internet in the 1990s but says there wasn't a second act. He says news Web sites are too slow to read, even slower than flipping through a newspaper.

Business Insider notes that Schmidt essentially told newspapers, "Quit Whining And Create A Product Readers Want," but that Google hopes to be part of a new business model going forward.

"Try to figure out what your consumer wants," he said. "If you [upset] enough of them, you will not have any of them."

"We think we can build a business with you," he said. "That is the only solution we can see."

Comments

[Furby]

Let's test that theory. Without looking, can you remember the first advertisement at the top right of this web page? Without looking, can you name one single advertiser on this page? I couldn't because I've developed a blindness to advertisement on web pages. Never look at them, rarely purchase anything provided by them. Wonder if that's the norm, and why advertisers think it works.

[benji85]

this also happens in print media as well.

[BluebirdofUnhappiness]

One is a site for medicine similar to the online encyclopedia Wikipedia, which lets users collectively contribute and edit entries

Wow, that sounds frightening...and useless

[iddja]

The google deception over brands all over the world MUST STOP.
Web site owners, brand owners and content creators all over the world UNITE!
Let the internet revolution begin! Let the Google monarchy forever end! Let the FREE content market place begin!
http://www.iddja.com/

[AmeriGus]

The advertising-revenue plan relies on "brain pollution" -- the vast majority want the content but not the advertised product. This slows the web and the reader experience.

To me, a more sensible vehicle for online journalism is the micropayment, where users can pay a tiny, tiny fee, perhaps even a negligible amount to be one of many readers subscribing or paying-per-view. If there was a meaningful collection system in place for these micropayments to be accumulated and disseminated, it would reward the creator directly (with a processor taking a small slice). This would benefit not only authors and publishers, but musicians, video creators, bloggers or even charities. Web 2.0 tools enable pop-up password prompts without needing to leave a web page.

Paypal is slowly recognizing this, lowering it's minimum payment amount in 2005 from 30 cents to a nickel. But it's got to be even more convenient. I'd love to surf the web, micro-paying authors, artists and others with a nickel here, a dime there if it was quick, easy and safe. It's nothing to the buyer but could add up meaningfully for the creator. This would reduce the advertising we'd all be subject to, speeding the web up, while directly encouraging ingenuity and creativity and helping to stimulate the economy.

Another key to this would be the voluntary contribution model, where users can set what they'd be willing to pay for content.

Is the new Secretary of Commerce listening?

[perk]

Why does the Secretary of Commerce have to do with it? If people want it, someone will make it and they will flock to it. If not.... neither of the above

[UserLoser]

Not only slow and stupid. They seem to be all about one sided stupid editorial positions. Wapoo for example. You'd think the Washington Post would be a better paper or at least more balance paper but it is so right leaning it's going to capsize whatever. I live in Buffalo and they have a better managed but still stupid newspaper it's like the newspapers in this country can't even think straight....

[dansac]

I think the newspapers are toast. 20 years to figure it out and suddenly they're going to crack the code now? After all the innovators have filled the void?

I doubt it. More evidence here:

http://thedigitalists.com/2009/04/08/are-newspapers-done-for/

[Saidas]

I like getting my news from different sources online. The only serious drawbacks are when it comes time to move, I can't pack my boxes with online content and when I get a new puppy to train, I can't put the online content on the floor or swat his nose with it. I do manage however difficult.

[MurrayAbraham]

People like Eric Schmidt and TV network/cable CEOs should work at finding revenues for traditional newspapers fast rather than criticizing them because they provide the actual content for internet and TV news!

Who will do the actual reporting once the newspapers are gone? Some search algorithm?

[arusticat]

There are some logistical issues that make profiting from newspaper publishing difficult but the industry has to look at itself in the mirror and ask themselves how well they have served their constituents.

A newspaper such as the New York times once sold integrity. But when they had Judith Miller on staff writing white house press releases as though it was news - and was found out - what did the NYT have left to sell.

The Book Review section of the NYT is still excellent but you have to read the news section with a grain of salt these days - so why buy it.

And Jon Stewart is the unlikely new face of journalism. He'll point out a politician's use of twisted logic, he'll ask the question that needs to be asked - the newspapers don't and haven't for at least the last 8 years.

If the newspaper can't sell news, what can it sell? The Arts, book reviews - information I enjoy but don't need on a daily basis.

[westreal]

"news Web sites are too slow to read, even slower than flipping through a newspaper."

He is so right. It's the reason I don't even go to my local newspaper sites. Even more frustrating are the local television websites like ABC. They'll give you a story on TV about a local store and rather than give the website of the store they say "you can find them through our website at blah blah.com" You go there and you can't find the link to the story or you have to literally decode the website byte by byte to find what you need. Why go through the hassle when you can Google everything you need or sites like HuffPost condenses everything so nicely.

[NevaforLeadership]

Couldn't have said it better myself.

Newspapers have been carried by advertising, not subscriptions, for years, so why would it change now.

What does have to change are newspapers as we have known them. They have gone forever - to be broken up into various divisions of content, but only the content that people want to read.

One more thing to newspapers: You are getting stuck on copyright. Get over it. What has changed? People have been able to, and have been, copying newspaper content for years. Why the sudden panic now. As long as the copied material is cited/linked properly, who cares. Suddenly photographers and journalists expect to be paid top, exclusive prices over and over again for their work, when they have already been paid for it.

Keep in mind what has happened to music and is now happening to photography. Stock editorial sites expect their customers to pay approximately $50.00 per photograph. That's for a photograph for which the photographer has already been paid. They have the choice. Watch your photographs languish on the internet, never to be used, or start charging reasonable prices and watch the money rolling in. $50 x 0 = $0. $5.00 x say, just 100 purchases = $500.00. I don't need to say any more.

[skyshoes]

Love the Google, love the internets... Is Schmidty and Brinny gonna take their (on paper) billions and pay the journalists all over the world that the, hock-patewy (spitting on the floor in disdain) "evil" news papers pay now? Just askin'...

I think we have some Wall Street economics at play here kiddies.

[blake510]

If there were one central newspaper site where articles to all major news papers could be accessed easily. I think I would pay $5-$10 a month for access to that site. Then they could pay out to the newspapers based on volume of hits on their respective articles. That's the only way I can think of that it could work.

However that does put alot of power into Google's hands, who is the most likely candidate for such a site, and I'm sure newspapers are very skittish about that.

They need to put up or shut up though.

[tailgateshirts]

The only difference between the web and a real newspaper is paying 35 cents, and they throw enough ads on the website not to matter anyways...

[TalkTalkTAlk]

I like the newspaper, i dont see why i pay for it when they have all those ads in it, raise the ad prices make the newspaper free and give one to every single house in the usa

[johnie2xs]

I agree with the free idea, but to add to that, give papers free to schools,also. Day olds would do it, or the Sunday paper on Monday. Let the Civics classes(If they even exist,anymore), use them in there course of study thereby cultivating a new generation.

Just sayin'.

[NevaforLeadership]

Newspapers will have to be different on the internet. All the superfluous stuff in them now will have to go.

The content will have to be free, though. There is just too much free, competitive content out there to be successful charging for it. I believe, advertising will indeed be the future.