The Debate Over Online News: It's the Consumer, Stupid

The discussion about the aggregation and distribution of content on the web heated up this week when the Associated Press announced plans to "launch an industry initiative" designed "to protect news content" online.

The announcement -- characterized by the New York Times' Saul Hansell as a "war on search engines and aggregators" -- drew considerable fire, including blasts from Google, BusinessWeek, the Online Journalism Review, TechCrunch, and this classic broadside from Danny Sullivan at Search Engine Land.

The conversation continued last night when Charlie Rose invited me to discuss the issue with Tom Curley, AP's president and CEO. The video of the segment is below.

As you'll see, for me the key question is whether those of us working in the media (old and new) embrace and adapt to the radical changes brought about by the Internet or pretend that we can somehow hop into a journalistic Way Back Machine and return to a past that no longer exists and can't be resurrected.

As my compatriot Heraclites put it nearly 2,500 years ago: "You cannot step into the same river twice."

Towards the end of the segment, Charlie summed up what I was saying: "We have seen the future and it is here. It is a linked economy. It is search engines. It is online advertising. That's where the future is. And if you can't find your way to that, then you can't find your way." Precisely.

The great upheaval the news industry is going through is the result of a perfect storm of transformative technology, the advent of Craigslist, generational shifts in the way people find and consume news, and the dire impact the economic crisis has had on advertising. And there is no question that, as the industry moves forward and we figure out the new rules of the road, there will be -- and needs to be -- a great deal of experimentation with new revenue models.

But what won't work -- what can't work -- is to act like the last 15 years never happened, that we are still operating in the old content economy as opposed to the new link economy, and that the survival of the industry will be found by "protecting" content behind walled gardens.

We've seen that movie (and its many sequels, including TimesSelect). News consumers didn't like them, and they closed in a hurry.

And the answer can't be content creators huffing and puffing and trying to blow down Google and other news aggregators. That one falls under Be Careful What You Wish For. As Jeff Jarvis points out, doing that is a one-way ticket to oblivion -- and a 50 percent drop in traffic.

HuffPost has a good working relationship with AP -- we pay a monthly fee to license AP stories and photos. But I was really surprised to hear Tom Curley describe what he called "the Internet experience" as "a bomb. Unlimited competition, unlimited inventory, a bad customer experience."

A bomb? Really? Tell that to the consumer. And since when does "unlimited competition" and "unlimited inventory" (i.e., lots of options and choices and freedom) add up to "a bad customer experience"?

Indeed, it's just the opposite.

Can anyone seriously argue that this isn't a magnificent time for news consumers who can surf the net, use search engines, and go to news aggregators to access the best stories from countless sources around the world -- stories that are up-to-the-minute, not rolled out once a day? (That's one of the things we try to do at HuffPost: guide our readers to the most interesting and timely news and opinion from places they know and from places that we introduce them to, as well as offering them original reporting, 200 original blog posts a day, citizen journalism, and our new investigative fund). Online news also allows users to immediately comment on stories, as well as interact and form communities with other commenters.

Consumer habits have changed dramatically. People have gotten used to getting the news they want, when they want it, how they want it, and where they want it. And this change is here to stay.

In many ways, the news industry has appropriately adapted to these changes.

Take online video. Not that long ago, content providers were committed to the idea of requiring viewers to come to their site to view their content -- and railed against anyone who dared show even a short clip.

But content hoarding -- the walled garden -- didn't work. And instead of sticking their finger in the dike, trying to hold back the flow of innovation, smart companies began providing embeddable players that allowed their best stuff to be posted all over the web, accompanied by links and ads that helped generate additional traffic and revenue.

When I hear the heads of media companies talking about "restricting" content (as Curley did) or describing news aggregators as "parasites or tech tapeworms in the intestines of the Internet" (as the editor of the Wall Street Journal recently did), I can't help feeling the same way I did in 2001, when I was one of the cofounders of The Detroit Project, and watched as the heads of the auto industry decided that instead of embracing the future they would rather spend considerable energy and money lobbying the government for tax loopholes for gas-guzzling behemoths, fighting back fuel efficiency standards, and trying to convince consumers through billions in advertising that SUVs were the cars that would lead America into the 21st century.

Instead of trying to hold back the future, I suggest that media execs read The Innovator's Dilemma by Clayton Christensen (since I keep mentioning the book and giving copies to friends, I'm thrilled that Christensen is now blogging for HuffPost), and see what he has to say about "disruptive innovation" and how, instead of resisting it, you can seize the opportunities it provides.

Or go to any college, as I often do, and ask a group of students how many of them, during the campaign, saw Tina Fey doing Sarah Palin. It's usually 100 percent. Then ask how many saw it on Saturday Night Live. It's usually no more than one or two. Yes, SNL could have said tune in to NBC Saturday Night at 11:30 or don't see it at all. But Lorne Michaels and Jeff Zucker obviously don't want to go the way of Rick Wagoner and his Detroit buddies.

Delivering the keynote address at the Newspaper Association of America's annual conference on Tuesday, Google CEO Eric Schmidt cut right to the chase, telling the assembled newspaper men and women: "Try to figure out what your consumer wants. If you piss off enough of them, you will not have any of them."

After we posted the Charlie Rose segment, HuffPost commenter osage weighed in: "EVOLVE OR PERISH. If AP refuses to adapt to the demands of the internet marketplace, it will disappear just as surely as 5 1/4" floppy disks and public pay telephones have disappeared. Resistance is futile."

I'd love to hear your take. Fire away in the comments section.

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Comments

[dsTrekker]

This is a brilliant article, full of dead-on observations and perspective, such as "Can anyone seriously argue that this isn't a magnificent time for news consumers who can surf the net, use search engines, and go to news aggregators to access the best stories from countless sources around the world..." It is a pleasure to read something so intelligent. I especially liked Heraclites's admonition: "You cannot step into the same river twice." The news business is changing at lightning speed. The future belongs to citizen journalists armed with cell phones.

[Euroflycars]

(continued)

There is need for an ethically certified entity to select and publish vital information for a sustainable future of mankind, i.e. with an educational commitment and with the aim to reach a critical mass of citizens -- which could indeed best be done by… paying the readers!

GoodRead wrote: "Personally, I will never, ever, pay for both access and content..."

Soon he might indeed claim to get paid for reading content – which isn't as abstruse as you may think, since reading needs time, and time is money...

Any major information provider who could afford to pay a crowd of readers could probably afford to pay its journalists left-handed -- but where should the money come from?

All of the nearly one thousand billionaires of the world could afford this financially -- yet few of them morally...

For the readers to be certain of the good faith of these few it would be necessary to resurrect nobility – I mean true nobility – deserved by individuals of unquestionable probity.

Hence the motto: after the new rich, the new noble!

Alas, only a yet to be founded World Authority for the election of such persons to a panel of new noble entitled to edit newspapers paying their readers could ensure ethically purposeful content with an underlying educational commitment.

[Euroflycars]

The problem with the internet is the sheer mass of information -- who's got time to assess the content of even a single site like Huffpost? That's one site, one language -- I'm trilingual, imagine my frustration.

We need a trustable body officially mandated to select a concentrate of relevant daily news published on paper along with contextual analyses, with the possibility of keeping track of all information, e.g. with a pocket scanner like Logitech's famous -- yet, alas, no more available -- Scanman (probably dropped by Logitech because its founder and chairman Daniel Borel, having started his company in Silicon Valley, was deemed to abide by the rules of the US Fourth Estate presumably opposing easy back-tracking of content consisting of lies, omissions, and distortions -- just imagine a modern Scanman with LCD and folding keyboard for annotations, storage capacity for thousands of columns, and tiny rubber rollers with built-in micromotors for straight and steady scanning).

The tenants of power are withholding from us not only relevant information, but also genuine electronic products (think of other "killed" products like the Poqet PC with professional keyboard, black and white LCD screen for daylight legibility and low consumption, replaceable standard batteries, and of course solid state storage… a combined pocket scanner/ty­pewriter/c­amera would be ideal for an army of amateur investigative journalists!)

(continued in my next post)

[SunniDai]

Euroflycars is absolutely correct! I realized quite some time ago, say a few years ago that with the opening of the flood gates of information avenues, we as individuals would not be able to keep up with every single thing out there! I mean, look at me right now, I am responding to this comment at 10:31 p.m. since it is the first time today I have had a chance to review the HuffPost which I really enjoy ONLINE!

I think everyone would agree with me, when emails came into our lives at work, our work ethic relative to production on a daily basis went out of the window! Who can work when you have to respond to 50, sometimes 100 emails a day?! Not only that, if you don't respond in minutes, folks take offense because they figure you should be there tapping away and not working on the project you were assigned.

So compound that information channel to all the others that are out there and it is extremely overwhelming, challenging and stuff gets lost in the mix.

[murphyoung]

Yes, you are correct. I appreciate your reports, and I am guided by the reputation and qualifications of your reporters;; therefore, my choices are based on what I have read in newspapers and periodicals. In that connection, I am much impressed by the Salon piece by Mieszkowski, 4/13/09, Spare news for change. I still LOVE the daily papers, even as I am addicted to blogs.
Gertrude, Oakland CA

[Wanapitei]

It seems to me web-reader support of online media via micro-payments is a potential new revenue source for media organizations. About a dozen years ago there was a lot of talk about the potential of micro-payments but it was forgotten. I'm skeptical online advertising will every replace print advertising in printed newspapers, skeptical of the walled gardens of subscriptions. It's time to seriously investigate the potential. Serious journalism needs to be supported and micro-payments from its readers may be the no-fuss way to do it.

[Bethany Quinn]

The AP has it COMPLETELY backwards. Before aggregators like Huffington Post came around, I NEVER went to the AP's website, and rarely paid attention to which stories came from AP and which came from Reuters or Bloomberg or whatever. As long as sites that have more than a certain number of hits pay a licensing fee and/or don't post content directly but rather refer viewers to AP's website directly, aggregators are doing traditional the AP (and other traditional news services) a huge favor, basically serving as advertisers.

[OLDDOG65]

This is not about news or the dissemination of news it is about CONTROL of the news. For at least the last 8 years the conservative wing has been in total control of the news and what information the general public receives, and they are now faced with the prospect of losing that control and are scared stiff.
The ideal economic model of any industry expects the open access to the market that a company wants to compete in. The News Industry is no exception. The old models have been slowly changed into entertainment channels, not news channels, so the consumer begins to look for substitutes. It just so happens that C-Span, Huffington Post, and Media Matters are filling the void and satisfying the demand for news, when you want it the way you want it.
If you don't give your target market what they want, they will go somewhere else to get it. The only way to stop that from happening is if you control the entire supply chain. Since the late 90's the right wing has controlled the entire supply chain. They are about to reap the profits of that strategy, as one paper or tv network after another goes down for the count and younger and more curious and technically knowledgeable people turn to alternate sources for their information.

[dictatormovie]

You're right. Most people don't watch Tv anymore except really popular shows, nor do most people read print. It easier to get the excerpts (clips) and not waste time watching all the garbage from the show that we don't like or the commercials. It is also easier to log on to the internet and read news, BUT THAT SAID, there is a % of people who will NEVER put down that book or newspaper, magazine etc. This means that the owner of the print, et al, needs to find that target market/group and make it clear to advertisers that there will always be a % who uses traditional methods and charge ad revenue accordingly, because they are a loyal base.
That means that the traditional broadcast methods must stay in place AND have internet features, etc. and have internet shows with commercials, and use both avenues for the audiences.
I am the dictator and I have spoken!
www.dictatormovie.com

[lynettema]

I can't disagree with anything in Arianna's article. It seems simple to me. The newsprint became the mouthpiece for the government - which at the time was the Republicans. When that happens, you see what has now happened to our country. If media had questioned the Bush administration, done real in depth investigation of WMD's etc., we most likely would not be mired down in Iraq. That is just the most obvious example. Even my district newspaper in the middle of Iowa pushed the GOP agenda on us all. Many of us sensed this was wrong, but where were we going to get different information? Thanks to the Internet, we have a place to go to find facts.

So this is the crux of the situation. The old media which largely still supports Right Wing agenda, regardless of Right Wing protests to the contrary, is losing its audience. Until they begin reporting what the average person sees before their eyes, which is what the losing conservative ideology brought us, they will continue to lose their readers. They need to report the news, not Republican talking points. They are very much like the Republican Party right now who doesn't understand that it is the message, not necessarily how it is delivered.

Now if there is good customer service as well as accurate, in depth reporting, they will have a chance.

[indy100]

Couldn't agree with you more lynettema. Most of the newspaper outlets, and mainstream media are owned and run by right wing Republicans. And they all became the flunkies of the Bush Administration. There was never anything even resembling impartial or investigative journalism. I now NEVER watch American news. It's fluff, innuendo and junk with a touch of news thrown in. Some, like FAUX news, borders on nothing more than slander and gossip. I do skim the local newspaper, but I prefer to do it online, partly because you can post comments or opinions. Plus you can do it when you have the time, whether ir's 5 minutes or a half hour. An actual newspaper is really only good on a leisurely Sunday morning, while having coffee.

My kids, all young adults, rarely read a newspaper. They get their news from the internet, sometimes from local tv, and from friends and family. That is the new generation. These big media moguls are completely out of touch with who they are, how they live, and what they want. And that spells doom unless they adapt and change their ways.

[newleaf]

Arianna, I love you so much. You are so thoughtful and insightful. HuffPo and other media outlets that are, admittedly, left-leaning are what keep me sane as I deal with unyielding and nonsensical persons of the conservative persuasion. It is so nice to witness your example of media which doesn't hide their head in the sand and expect the public to bend to their whims.

[bayside]

Media forgot they need us, we dont need them..I knew what they were doing ,so refused to watch or hear them. Over half of america was threatened ,villified,by the becks, oreillys , hannity, ann ,fox news etc..We lost our watchdog the last 8 years, and I dont know if they can get our trust back..They quit us we didnt quit them.

[reason808]

Arianna, I think you're looking at the bottle instead of the wine. The biggest selling point of your site is its editorial perspective. Huffpo was the only place I could find intelligent skepticism and analysis during the Iraq war.

I turned to you for news when the media was a mindless cheerleader for the Iraq war and stock market.
Despite massive failures, TV and print media still frame debate around descredited right-wing ideas. You feature many posts that have moved on to the next stage of debate. That's why I still read you every day.

The internet may have opened up an opportunity for new voices, but if print and TV news were providing information instead of cheerleading they wouldn't be worrying (as much) about the shifting media/technology landscape.

[swkidder]

In a word, "Yes."
I will pay for 2 things - real investigative journalism - conspicuously absent from the MSM, and an honest perspective - ditto. Huffington Post is an excellent source in which to find that honest perspective, and it appears as though Arianna & team are poised to jump into serious, in-depth reporting.
The AP and other news sources are losing out in "today's news economy" not only because we consumers can access "their content" in many ways, but also because "their content" isn't all that valuable. I'll pay to read great investigative journalism because I always learn something valuable when I choose to invest my time in reading someone like Seymour Hersh. But I certainly won't pay to read an AP puff piece that offers a shallow summary of an issue that I can immediately see goes 3 or 4 levels deeper than what I just skimmed. AP's problem is both "vertical" and "horizontal." Fixing one without the other won't do the job.

[DoctorDoctor]

maybe this is the problem with the 4th estate:

Delivering the keynote address at the Newspaper Association of America's annual conference on Tuesday, Google CEO Eric Schmidt cut right to the chase, telling the assembled newspaper men and women: "Try to figure out what your consumer wants. If you piss off enough of them, you will not have any of them."

when the consumer wants to know more about the kitty in the tree down the street than intergalactic fraud assisted by the republican power-brokers that's eating their lunch, i'll eat my hat. this is the definition of non-news newspeople --- the electricians the newsroom guys used to love to hate. now it seems to be the whole, damned profession. all propaganda.

but even here, the net can help. just for grins, compare the raw reuters or ap feed (from something like channelchooser.com) with what gets reported by, say cnn (no, fixed news isn't even in the running. that's just the rnc talking point list). now you know what cnn selected from to report. do you agree that their selections reflect your interests or the interests of the country? me neither. i used to listen to short wave radio for the news (under bush 1). now it's easier --- thanks to the free web. it's more transparant now than its ever been.

we're educating the wrong kids.

[mom2luke]

I agree w/ the person who said, " I do not believe that AP wants to be paid repeatedly. In too many instances they are not being paid at all, in direct violation of copyright laws..." as are the newspapers who basically are putting themselves out of business by ALSO providing great websites/comment sections like Washingtonpost.com.

Good newspapers --with good objective investigative reporters-- provide a valuable local/national service and much"sweat of the brow" services which they SHOULD be compensated for! ...the fact that many people prefer to get their info "free" online isn't surprising , but it doesn't mean they should get a free ride indefinitely! If newspapers disappear, online content will suffer! Therefore my idea is newspapers that meet certain standards SHOULD be subsidized by part of our internet connection bill that we so happily pay b/c we are addicted to internet, our computers, cell phones, email. Every one has internet access these days...with this critical mass, we should all support our local newspapers...an important part of democracy. Which reminds me, Huff Post you should link to Democracy Now....one of the best, truly OBJECTIVE, non-establishment news sources that is way ahead of the curve uncovering important news the "establishment" fears to report.

[adrianrf]

no, *you* evidently don't understand that the oh-so-vaunted newspapers -- and especially the AP -- have no credibility with a huge section of the population. that's because they whored their brands into the ground; they abused the trust we used to place in them, by acting as uncritical propaganda arms of the corporate/Repuke machine. they actively abetted its agenda with the lies that lead us into "preemptive" war, the deceits that covered up stolen elections, and the diversions ('wedge issues' and outright distractions ["yet another white teen goes missing/dr­unk/comman­do"]).

what we've learned is that we can replace them. we sample a broad set of sources, and collate our own personal synthesis of What We Believe Is Close Enough To "The Truth". it's far healthier.