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On Newspapers and Google: What's the Real Problem Here? What Do Readers Want? - Updated 3Xs
Wednesday, April 08 2009 @ 04:14 PM EDT

Here's what I've been waiting for before diving into the AP/Newspapers versus Google discussion with my point of view, a complete transcript of Google CEO Eric Schmidt's Q&A at the Newspaper Association of America convention. Thank you very much, Poynter Institute. The audio is available, which I first learned about from Todd Bishop on TechFlash. I didn't find the link in a newspaper, online or off, and I tried. I found it on TechFlash, a blog connected with the Puget Sound Business Journal, doing a little innovation on the journalism model.

That is a symptom of one problem traditional newspapers face, that sometimes they aren't as informative as they could be. They don't grok the Internet even when they go online, or understand what we want when we are searching for information online. But that's not the core problem.

There are trust issues too, but they tie into the main problem I see, which is that news content has never been what primarily funded newspapers, and it *should* never be. It was the ads and the listings that funded print newspapers, and they flew the coop and landed on Craigslist. That loss of a revenue stream is the principal problem, and newspapers have to find some replacement. Charging for news articles or even ads on news articles won't do it online any more than it did in print. They have to offer something people want, something they'll pay for, something that will be as remunerative as the listings that went to Craigslist were.

They have to sell something besides news that people will pay for that will fund the journalism. There. I said it.

Why did the classified ads go to Craigslist? Because new technology showed up, and you can't win with an old mousetrap once a better mousetrap shows up. Is there any reason newspapers couldn't have provided what Craigslist did? Other than thinking of it, I mean? They could have done Google too, for that matter. And now they're mad because others thought of things they could have thought of but didn't, because they didn't know how.

The audio of Schmidt's Q&A is Microsoft-only, which is ironic, in that Google built its business on Linux. But then that's one problem in a nutshell, I'd say, that newspapers aren't keeping up with technology. Schmidt mentions that, but as a beginning on finding a solution, he adds:

So in the case you were describing, if I were involved in the digital part of a newspaper, trying to understand to do, I would first and foremost try to understand what my reader wants.

I would start with -- My diagnosis is: how do we get to 10 times more readers online? What do they want to see? What is their style?

Ah! What does your reader want? I'm a reader, so I'll tell you.

First, as the FCC suddenly woke up and realized, a lot of Americans don't have broadband. Duh. Who in the world wants to read an online newspaper on dialup? Most of the newspapers online are slow and hard to navigate, and with dialup, that's a nonstop frustration. A lot of them require cookies and Javascript. I avoid sites like that. But some Americans have nothing at all to go online with. Perhaps that is why Michael Copps, the FCC's acting chairman said this today:

"Broadband can be the great enabler that restores America's economic well-being and opens doors of opportunity for all Americans to pass through, no matter who they are, where they live, or the particular circumstances of their individual lives," Copps said. "It is technology that intersects with just about every great challenge confronting our nation -- whether it's jobs, education, energy, climate change and the environment, international competitiveness, health care, overcoming disabilities, equal opportunity -- the list goes on."
Newspapers need to get more tech-savvy.

[Update: Here's an example from TechCrunch. AP threatened an affiliate for using YouTube video from AP's channel on YouTube. AP then put out a statement that it was a "misunderstanding". If so, it was based on a foundation of tech cluelessness, I'd venture. Sigh. As TechCrunch aptly puts it, you can't make this stuff up. Note, please, on the left where it says "Embed this video" and provides a script to do so? Yet look what happened:

Frank Strovel, an employee at the radio station who tried to talk some sense into the A.P. executive Twittered yesterday:
I was on the phone arguing w/ AP today. We were embedding their YouTube vids on our station’s site. We’re an AP affiliate.
And then added:
They asked us to taken them down. I asked, “Why do you have a YouTube page w/ embed codes for websites?” Still… they said NO.
The story was picked up by the Knoxville News, and then by a local video producer Christian Grantham, who captured the following Skype interview with Strovel in the video below (which is not an A.P. video, so I am going to embed it). Strovel notes that the A.P. accused the station of “stealing their licensed content.”
"Stealing their licensed content." How do you reason when only one side understands what "Embed this video" and the script means? It's an invitation, AP. It's not "stealing" to accept your invitation. Did AP execs even know, before attacking Google similarly in public for "stealing" their stuff, that it *has* an AP Channel on Google? End update.]

If AP succeeds in getting a rule that you can't use a headline and link to it any more without paying someone, it's the death of the Internet. No. Really. Think about what the Internet is: a lot of computers *voluntarily* linking up to share information. It's foundational. I doubt AP even knows that. But you can't force people to want what you have. You have to figure out what they want, and then provide it. I tried to tell the music industry that in 2003. New technology wins. It doesn't have to replace the old, but it can't be killed, except at the barrel of a gun, and if you have to do that to your customers, you might want to rethink your business plan. Napster was a goldmine for the music industry, if they'd only recognized it. Instead they killed it and chose litigation, and now their customers hate and fear them, the few they have left.

If AP and the newspapers don't want to share online, they don't actually *have* to be on the Internet at all. Just print on paper forever. No? Or use a robots.txt file. Google respects them. No? Then please, if you want to be successful online, figure out the tech so you are not the bull in the china shop. It's a huge problem in this dispute that Google is the only party to it that understands the technology that makes the Internet, and search engines, work well. The old newspaper guys are so out of that loop that the only solution they see is to get a law passed to artificially keep an old business model alive, based on scarcity, even if it destroys the Internet. They probably don't even realize it will destroy it. And they have misdiagnosed where their money came from in the offline world and are complaining that it isn't happening for them online, when now they are offering less. This article by Alan D. Mutter on Newsosaur was eye-opening to me about the finances and expectations of newspaper publishers, and it left me wondering if the newspapers are suffering from Wall Street Syndrome, or not to put too fine a point on it, greed:

If newspapers had invested in new products even a modest fraction of the bodacious profits they reaped in the last decade and a half, they might have invented anything from MarketWatch to Yelp to Google.

Instead, publishers concentrated on accelerating profits to lift the stock prices that determined their bonuses and/or borrowed what proved to be dangerously large sums of money to buy more of the newspapers they regarded as perpetual money-making machines.

The newspaper industry is far from alone in suffering today for the smugness and greed that suffused the extended age of irrational exuberance that began with the Internet bubble and climaxed in the credit-default flop.

But newspapers are unique institutions. While life will go on if any given bank, shoe store or auto dealer fails to emerge from the economic miasma, we have yet to identify any institution that can fulfill the vital role played in every community by an independent, economically healthy, properly staffed and professionally edited newspaper.

He says they borrowed too much because they thought the cash cow would always keep growing. Sort of like the masters of the universe who thought home prices could never go down. So now Google's a "pirate", eh? And newspapers would like a quick fix from Google and to squeeze us readers for some dough. Maybe they should ask Congress for a bailout. It worked for Wall Street when those dudes "got drunk", as former President Bush so eloquently put it. [Cf. The Labor Dept. Investigating Tribune Company's Stock Ownership Plan -- some background.]

AP and the newspapers also want to give fair use a haircut, but even if they get that done, they'll never make a living from content alone. They couldn't in print and they can't online. All they'll do is destroy the Internet and fair use, and then what? They'll still be losing money. You can't replicate the old scarcity business model on top of the Internet. It's literally impossible, without killing the golden goose. You know why? Because computers copy. It's what they are. Copy machines. Exploit it. Don't fight it. But my point is that they've misdiagnosed their real problem anyway.

I don't know how you make the older generation let younger people take the helm of institutions like AP and the Authors Guild, but couldn't they at least ask some tech-savvy folks to give them a hand at figuring out their problem? Well, I guess Google could help them with that. Or the publishers could just take a stroll into their server rooms and pick the brains of their geeks.

What? Too simple? It worked for IBM. Sam Palmisano decided Linux was important because he noticed that all the programmers loved it, so he started to figure out why and what that meant. And he made a lot of money for IBM from listening to those geeks. Newspaper publishers could give that a whirl. Geeks are deep. They generally do know what is coming next. They know what tech can do for you now. Why are you not exploiting that resource?

Dan Froomkin wrote up a list of things he thinks Google can do to help newspapers. You can read Froomkin's list in its entirety, but here are two of his ideas, and then I'd like to address the second item on his list here:

There may indeed be nothing Google can do to boost print circulation. But there’s plenty Google can do to help the news industry, which is terrified about the loss of print circulation primarily because it hasn’t yet found a way to comparably monetize its journalism online. There’s also plenty Google can do to maintain or even increase the amount of quality journalism available on the Internet. Off the top of my head:
  • “Adopt” a handful of newspapers, and help them build technologically-sophisticated Web sites, with an emphasis on micro-local and business-to-consumer relationships. For instance, local papers need ways to database local advertising, local content, and information on local readers — then serve up ads based on psycho-graphic and geographic information. Newspapers can’t seem to figure this out by themselves. Then make the technology available to others....

  • Create “endowed chairs” for bloggers who can then quit their day-jobs and do actual reporting as well as blogging.
Some of us already do actual investigative reporting, even without such help, I would point out, but money always makes it possible to do more. But there is a potential problem with any such funding, and it's related to what is killing newspapers: editorial control and influence on editorial content in order to pay the bills. Any such funding has to be separate from any editorial control or influence. There has to be a Chinese wall between editorial and marketing, or it's not journalism. It's entertainment. There is a difference. [Exhibit.]

When you set up a business model where the news content has to be the main money-maker, it invariably degrades the news content. In my view, newspapers are dying for that very reason, because people no longer trust them. They spin so much, while pretending not to, that people would rather read a straight-up, honest blogger, warts and all. And there is sometimes a serious lack of factual accuracy in the mainstream press. It's pretty bad when the comments under an article are more informative and accurate than the article itself. I have come to believe that when I see that, it's probably because someone's agenda is bleeding over that Chinese wall. If I see it, others do too. No one likes to feel manipulated.

[Update 2: It occurs to me I should give an example of factual inaccuracy. Here's one from BusinessWeek. Simon Phipps is not on the board of Sun.]

[Update 3: You will not believe how hard it was to fix that mistake. Well, BusinessWeek says it will be fixed. Outsourcing to India enters the picture.]

Publishers also kept reducing staff, trying to save money, by replacing good journalists with cheaper youngsters just starting out, or not replacing them at all, and it shows. Even AP harmed newspapers, in a way, in my view. Newspapers stopped covering important things locally, leaving it to AP to feed them content and adding in cheap fillers, like "news" about movie ratings (check who owns the newspaper to see why they think we readers must read about that when we are barely interested) and star divorces and recipes (look on the Internet for recipes and you'll see why that can't work), and that in the end is what folks want to know about on a daily basis, local news. They want a reporter to dig into corruption in City Hall, if it's there.

Hahahahaha. If.

When they stopped doing that, should they be surprised that people lost interest? Newspapers by and large forgot who they are. The. role. they. are. supposed. to. play.

The real problem with newspapers is that news was never supposed to be concerned with or attached to the marketing. When that happens, and journalists are what you rely on to pay for the business, you kill its value, because marketing always hops on top, and then you lose trust. And quality. It simply can't ever, ever work. It's sad but true that a lot of folks won't pay for the very coverage they absolutely need to have to know what is happening in the world. That doesn't mean it's not interesting to them or that they don't want to know. But you can't charge enough to fund real journalism. It's a Catch 22, but that is the fundamental problem. Journalists have to be completely separate from the bean counters and the ad department. That means there has to be some way to make money outside of selling just the news content.

I don't mean no one is still trying to do real reporting, because some still do and care about the ethics and standards of real journalism, but are the publishers by and large looking for an Ed Murrow? With notable exceptions, I don't think that is the highest goal any more. Where were the newspapers and other media in covering Iraq before the war? Torture? The Constitutional liberties issues? SCO, for that matter? Whatever your politics or even if, like me, you don't have any, those are newsworthy topics we all want to know about, and we need to know where true north is. It's what journalism is for. Where was everybody?

If they'd done their job on SCO, for that matter, there'd never have been a Groklaw. I'm noncommercial, but that doesn't mean I didn't know how valuable this audience is to anyone who wished to exploit that interest. For that matter, you could have mini-Groklaws, or branches, all over the world, covering local litigation of interest to people just in that area. Or litigation of interest to any niche group. You don't even have to profile anyone. They profile themselves by showing up.

The mainstream guys could have done what I did, except they didn't, maybe because it didn't fit the usual mold. It's a new kind of journalism, using the Internet to do things you can't do in print, on paper. That is seriously part of the problem they are struggling with -- they don't see what technology now makes possible.

And they don't understand that what people want is *more* information, not less. Why would it be that it was only on TechFlash that I could find a link to the audio of Schmidt's remarks? Blogs like TechFlash, and if I may say so, Groklaw, fill a need, one that only the Internet can fill -- and the why is this: there is no space limit. People online want to dig as deeply as they have an interest in a subject. They want the raw data, not just analysis on top of it, so they can reach their own conclusions. It's hard to do that in print, of course, but you can do anything online, where there can be endless galaxies.

There isn't a newspaper out there who couldn't have made Groklaw irrelevant, if they'd only tried. Groklaw identified an audience with a particular interest, and then it filled that need, one that nobody in the mainstream press even tried to fill. Do they not see that the Internet is born for niche interests as well as for mainstream news, and that there's money to be made in that?

What are they offering instead? May I offer up Exhibit A? Why is that on ABC News? Do I care if Lindsay Lohan is miserable without Ronson, or whatever her name is? To whom is that "news"? It is news only if you redefine news as a way to pay the bills. Short term, it might pay some bills, but long term, it kills your news business, because you end up being not very important to anyone and disgusting even yourself.

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