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Penny Herscher

Penny Herscher

Posted April 15, 2009 | 01:48 PM (EST)

Technology, Not War, Is the Solution to Publishing


The global publishing giants have declared war on the new technology generation of content distributors -- but they have lost sight of what consumers value and how they want to get to the value. It's time to separate content creators from distributors. It's time for a new business model which requires technology understanding and leadership to develop -- and one that new generation search applications like Google News and Digg for the consumer, or FirstRain for the professional investor, can sign up for to get the right news to the right people at the right price for them.

Local publications like The Boston Globe are teetering on the edge of bankruptcy, others such as The Seattle Post-Intelligencer are moving exclusively online after 146 years in print and global giants like the Associated Press and Wall Street Journal are trying to fight back. But the reality is this is too little, too late and effectively going to war with your customers is a fatal strategy as Arianna Huffington posted a few days ago.

Face it -- the consumers of news have changed -- dramatically. We no longer read multiple news sources on the hope that we'll find something interesting, most of the younger of us don't take a daily physical newspaper and as services like Facebook, Digg and Twitter have shown, we expect the most interesting news to find us. It's not that we believe news should be free -- clearly there is discovery, research and production cost, but it should be allowed to roam freely across the many channels the web enables and still maintain proper attribution.

Our customers at FirstRain have shown us over the past three years that the authoritative news is no longer only found in the WSJ, FT et al. Instead it's media like the DailyKos, Gizmodo, Consumerist, and In the Pipeline that are increasing the size of the news market pie and creating a huge demand for such obscure, on-the-edge news. In addition, the value of each piece of news varies by who's reading it and what they plan to do with it. What a college student reads about Apple, Inc. on an obscure blog may be informative and help him plan on his next iPhone purchase, but to a portfolio manager at a Hedge Fund, that same information may be the bit of news he's been looking for to insert into his model and make a multimillion-dollar trading decision. In both cases the news has value but the value, the search technology to find and rank the news and the delivery model is different in each case.

The critical issue still stands though -- original investigative reporting is a public service that we, as a society, cannot do without. Journalists are our educators and our whistleblowers, our eyes and ears on the ground.

The news industry needs to find a recovery path through innovation and collaboration. As Scott Karp points out in his article in Publishing 2.0, this is a technology issue that is outside the comfort zone of traditional publishers. Here are three steps the AP and its 1,500 U.S. daily newspaper members and the Newspaper Association of America (NAA) need to consider in creating a viable business model for themselves and their customers:

Protect the original content creators: Grant original content producers the opportunity to file as nonprofits under the same laws and protections offered to the Public broadcasting companies as supported by Senator Benjamin Cardin, of MD.

Track the content: Work with aggregators like Google News, Yahoo, MSN, as well as NYT, WSJ, and the like on developing a new HTML standard that can be inserted into the original news articles to enable the tracking of news throughout its lifecycle.

Develop a fee-sharing business model: Work with content distributors on an appropriate fee-sharing model to enable the distribution of originally published news through the various niche channels as diverse as Google News, Bloomberg, FirstRain, and even a locally-published community paper.

These options would give content producers multiple channels to sell through, and the ability to charge a real market price based on each distributor's reach and depth, while at the same time providing an opportunity for smaller players writing original content to distribute their content through major channels for added revenue, outside of Google Adwords.

Then the AP and NAA would create a competitive environment and a generation of startups through which news is distributed to consumers and business professionals. And better yet, this would drive the separation of content creation from distribution -- and set up a long term sustainable business model which is what the publishing industry so badly needs.