The Survival of Newspapers

[drplokta]

The survival of newspapers in the Internet age is back in the news, with the Murdoch titles starting their suicidal move to lock their content out of the ongoing dialogue that is the Internet. So here's my view.

There is still a role for newspapers, and they can thrive online by filling that role. What they have to do is to cut their costs dramatically -- probably by 95% or more -- by stopping doing everything that someone else, anywhere in the world, is doing better. Why would I want to read the Guardian's coverage of the US elections when there's fivethirtyeight.com? Why would I want to read the Times's technology column when there's ArsTechnica? Why are newspapers still paying journalists to lightly rehash press releases that they don't even understand (of which I have lots of personal experience from looking at the generally appalling house price journalism in the UK)? I don't need a newspaper to compile the news for me any more; I have an RSS reader.

So, my advice to newspapers, and to journalists, is to specialise. Journalists have to do a 180° turn -- it used to be that a good journalist was one who could write shallowly about anything; now a good journalist is one who can write in depth about one topic better than anyone else in the world. Identify what content you have that's better than anyone else, and keep it; ditch the rest. Your advertising revenues should then seem quite reasonable. If you can still make money by printing a generalist publication on paper, then stick with it, but don't expect the Internet to work the same way, and don't destroy your Internet presence to try to save your old business model. We will end up with a lot fewer journalists doing a much better job.

Comments

[surliminal.livejournal.com]

Yes they're making money from volume; but only in the sense that they *have* the volume *because* they control the best and only db out there that will ever predict well what ads a customer *is* likely to respond to: because they have every search term you ever entered primarily plus all the data they glean from gmail, gst view, doubleclick etc etc. The whole point of Google is that this idea that we have no idea what ads the customer responds to is (a) not true anymore bcause G has the data to overcome that at AdWords level and (b) the nature of the attractiveness of the ad itself on the *customer site* isn;t their problem - all they want is click throughs (tho I believe that model is changing in web 2.0 if not on Google itself to click-through-and-place-orders. but at moment it's win win for them.

What you can't do is replicate that micro targeting for any other business that isn't Google, yes. Which is why I started this thread by saying Google was doing ok at this online ads business model and no one else was. Not because they're dot.com whizz kids (the salient fesature of dot.com bubble businesses was they had hype but zero actual profits - hardly true of Google which makes all its money, I repeat, from SELLING ADS - what it says on the tin as their business, not venture capital..) And yes when they aren't the overwhelmingly incumbent dominator of the search mkt, Google won't have that model right either (in the snes etheir db will become partial, like everyone else'), so in that sense yes they are fragile but in Eu at least that's a helluva way away.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1435105 explains some of why I had to swot up on this.

[daveon.livejournal.com]

I'm less convinced that they actually target or predict all that well other than picking up on the specific words. I think success or what there is of it is actually based purely on volume rather than accuracy.

Adwords is really simple to run and really effective for niche businesses.

I'd argue that Facebook is actually a far far more dangerous enemy of Google's than anything else at this stage.

Where I agree with Hal is they are really throwing crap all over the wall trying to figure out how they can protect the business that works and ensure that nobody destroys their market.

[surliminal.livejournal.com]

Agreed that FB is by far their most likely challenger for taking the advertising cake. Except FB have rather shot themselves in the foot lately. But that won;t last.

[hal-obrien.livejournal.com]

"...they control the best and only db out there that will ever predict well what ads a customer *is* likely to respond to..."

I'll go along with "best," although that's damning with faint praise. Until such time as they get clickthrough rates above 50% -- which would be, you know, random chance -- any link between their actions and deliberate causality is speculative at best. If their predictions fail 92% of the time -- which, given the most charitable reading of the data you've presented, they do -- they are substantially underperforming random chance.

See Fooled by Randomness, Taleb, 2001.