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Netflixifying news? Think again…

Aug 16, 18 4:43 PM

“Netflix for News”. That’s a phrase I’ve started hearing in the last month.

It refers to an idea about how to save the news industry. I think most people who say it are suggesting a single subscription which users would pay, but which would give them access a wide range of news sites – a kind of super-subscription.

If we take a business model which has had recent success elsewhere in the media, the idea goes, we would solve everything.

Spotify has done it for music, Netflix have done it for TV and movies, why not do it for news? Subscribers would be paying, news organisations would have a new revenue source, and online media would be saved. Hurrah.

It’s easy to see why this idea has surfaced. Spotify has been at the forefront of transforming an industry ravaged by piracy into one that has returned to growth, with streaming increasingly driving it. Netflix is putting unprecedented amounts of money into amazing new commissions.

The news industry most definitely needs to drive direct consumer revenues, and so dreams of similar things happening.

Seems simple. Will it work?

Well… there are a few reasons why it might not be the ideal model.

Firstly, to state the obvious, music and TV are quite different from news. Music persists in a way that news does not. One person might listen to the same piece of music tens – or even hundreds – of times and still enjoy it.

People spend hours bingeing on box sets, sometimes years old. The ‘value-creating life’ of music, especially popular music, can be as long as decades, with TV and movies not far behind.

News, in comparison, tends to be short-lived. Its value-creating life can be as short as minutes or hours. Very few news stories hold significant economic value (or attention) for longer than a few days or weeks.

This means the model for getting payback has to be different. News requires constant re-investment by news companies to continue to have value, which needs be realised immediately. The investment and payback cycle for other media is typically a lot slower.

Is all news equally valuable?

In addition, news products tend to have more variable pricing. Unlike music, which broadly costs the same regardless of what it is, newspapers have always had highly differentiated pricing and products.

How do you equate the value of The Sun and The Times? Are they worth the same? Does someone reading one long article in The Times account for the same amount of value as someone else reading a short one in The Sun?

This is the challenge faced in a super-subscription environment, where the user pays the same regardless of what they read or how much they read.

How do you divide it fairly? Who should get what? And how do you ensure that making more investment in content, and getting it more widely read, delivers more revenue? Without that promise, why would anyone invest in expensive content instead of cheaper commodified stuff? You only have to look at today’s internet to see the answer to that question.

Algorithmic perversity

A super-subscription business model means that an algorithm decides how much individual news products are worth. It’s impossible to make an algorithm for this without producing perverse outcomes – I speak from experience.

If your algorithm pays publishers based on how many articles get read, publishers with long reads get punished. If it rewards “dwell time”, publishers who are good at producing very pithy articles get punished. If it tries to identify a user’s favourite publication and give it a bigger share, other unfairly lose out.

Algorithms like this, however sophisticated, create winners and losers and limit the ability of publishers to diversify their products and business models. On the contrary, they incentivise publishers to adjust their product in order to game the algorithm, rather than to please their reader.

That quickly becomes messy, so to minimise it, the provider needs to keep the algorithm opaque and ever-changing. The whole business model becomes shrouded in mystery. Nobody can ever know quite how the amount they are being paid has been calculated.

If you want to see that problem come to life, just look at how the Google search algorithm and advertising algorithms work. Key to the way they function, and acquire power in the market, is that almost nothing is disclosed about the way they function. Nobody is allowed to know quite how they operate. Those who control the algorithm are totally in control.

Not quite as simple as it looks

So “Spotifying” or “Netflixiating” news has a few challenges, even at a glance.

Perhaps they might be reduced by ensuring there are a number of competing services out there. This, though, raises its own issues.

For example, if services try to compete by doing exclusive deals with publishers, consumers will be left with a choice of incomplete services and might end up having to subscribe to several of them in order to get access to everything they want. Sound familiar to any Netflix and Amazon Prime fans? But if all the competing services have essentially the same offer, how many of them will survive? A competitive market for this sort of thing can be hard to sustain in reality and the consumer offer will be damaged.

So what’s the upside?

There is one outstandingly good thing, though, about these super-subscription models.

They are good at signing up large numbers of subscribers. If you want a subscription product to get to millions of customers, keep the price low – £10 per month or less is what you’re aiming for – give consumers a big choice of content, all included, and try to be the one subscription everyone needs. You’ll find loads of takers.

By comparison, it’s much harder to get people to commit to a relatively restricted product (like a single newspaper, for example) than a massive offering. That’s why subscription success tends to be limited to an exclusive group of high value publishers with affluent audiences.

The largest barrier to making subscription models work is getting that commitment from readers, so giving an immense amount of content in return is a good way to get them to pay.

Even if you could make it work, you shouldn’t want to

But there’s still a huge, massive problem with the whole idea of super-subscriptions.

Once you’ve persuaded all the publishers to take part, and you have the subscribers signed up, and you’ve developed a really compelling product and user proposition, and you have written an algorithm which divides the money up fairly, and you have managed to find a way to put high-priced, low volume products alongside low-priced, high volume products in the same service without any of them crying foul – none of which is easy – you still have to face the fact that you – and the publishers – have a terrible business.

Why?

Because you have set an upper limit on how big it can be. That limit is your subscription price. £10 per month, multiplied by the number of users you can sign up. You have to divide that £10 between all the publishers, and try to have some money left over for yourself.

That money will all be spoken for the day you go on sale. And there won’t be much left over to pay to new publishers who want to come and join in the fun. For them to get anything, you have to take it away from someone else, or try to increase price (and prevent the existing publishers from claiming the increase for themselves). Or the late joining publishers have to rely on advertising revenue – and we all know the issues with that.

It’s revenue, but it’s not a thriving market

So, this model produces some new revenue for the industry. Which is a good thing.

However, the revenue doesn’t increase in response to more content being consumed. It just gets shared more thinly between publishers, just as ad revenue does now. Not such a great thing if you want to see a bigger and more competitive market. More importantly, it reduces the rationale for investing more in content.

In a future “Spotified” world where total income is fixed, the incentive will still be to do exactly the same thing as now – minimise cost, maximise consumption, depend on advertising to drive revenue increases. It will just have an underlying, new, base layer of customer revenue which will only grow as long as new customers are acquired and retained.

It will not lead to a greater incentive to invest in product and content, because the market and opportunity will not grow any bigger in response to that investment. Not only is revenue limited by subscription rates in a “Spotified” world; so is market growth.

Super-subscriptions would be first aid for dying news brands, but not a cure

So, in my view, this model will solve little. It will give the existing players a temporary reprieve, but leaves an internet still far from the vibrant, thriving market it could be. The door is closed to new entrants, because the fixed revenue – the subscription price – means publishers who are involved will defend their share.

Be more ambitious, create a market which can thrive

There is a much more exciting, compelling and tantalising opportunity which publishers and regulators should focus on instead.

Imagine, if you dare, an internet in which every time a consumer reads something (or listens, or watches, or plays) the publisher makes some money. The more people consume their product, the more money they make.

What would happen?

Well… the best content, well produced, well marketed and wisely priced, would make the most money.

Which means the incentive to invest would change radically. We would see a lot more competition for users’ attention (and money). More products would be launched, and creative innovators incentivised to make their content compelling because they’re offered a direct reward.

Consumers would, in turn, increase their consumption because they’ve been given an ever more exciting choice of content to choose from. The market would grow every time someone decided to read more content. The job of the creators would be to get ever more creative about how to get them to engage more. And there are no limits set on the potential revenue for online content.

Publishers win big, consumers win bigger

But what about the poor old consumer, suddenly facing all this in place of what used to be free?

They’re actually the biggest winner of all. Being the source of the money places consumers in control – they become the masters of the algorithm. Nobody is going to part with their cash – or their data – unless what they get in return is worth it. Disappoint your customer and your business will suffer; please them and you win a huge prize.

This is happening right now

If you want to know how this can be achieved, I have spent the last year building the answer to that.

It’s called Agate, and you can try it now on publications like The New European, Popbitch and Reaction.life – and many more to come.

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So, saving the media. How?

Nov 22, 17 2:44 PM

Finally the emperor has no clothes. The creative media will never be able to adapt to the internet the way it is now. More and more people are saying it. Media is dying.

Why? Because it’s starving. There simply isn’t enough money to pay for everything. However good the media has been at garnering audiences and data, the impossibility of trading those things for meaningful amounts of money has become apparent to even the most optimistic enthusiasts.

Without money, media withers and dies. Newspapers, with a few stand-out exceptions, are withering away at an alarming rate. Magazines, long dependent on their print editions to keep going, have hit a wall.

The simple and seductive idea that advertising could translate internet popularity into money has proved itself wrong. We need not dwell on the reasons other than to observe that that advertising isn’t working, and has never really worked, as a sustainable revenue source for online media. After roughly twenty years waiting and hoping that things might change, the patience and financial reserves of the media have begun to run out.

Which leaves a gloriously simple problem. The media needs to make more money. It needs to translate audience into revenue.

If advertising can’t do it, what can?

There’s only one other source of money and that is the audience themselves. The stand-out exceptions I mentioned above are thriving because they’re charging for access. The London Times, the Washington Post, the Economist and so on.

For them, subscriptions are the central focus. The Times of London is profitable for the first time in living memory as a result of its obsessive, long term, subscription focus.

The only way customers can be persuaded to pay, and keep paying, is if The Times focuses on nothing more than producing a product which entertains, informs, delights and surprises them. That is great news for customers. The Times has to be trustworthy. It has to be consistent. It has to be, and to stay, excellent or people will simply decide not to pay for it.

The same is not true of free products, which need to capture enough readers to generate data to sell to advertisers.  They often do this by generating “click-bait” stories, which, as the name indicates, are a form of con and hostile to readers.  Free products need to display as many ads as they possibly can to maximise the (still pitiful) revenue that data can generate. They need to cut their investment in content and the creators who make it, to try to make ends meet, thereby short-serving their readers.

So even if being asked to pay seems, initially, like a bad option, it turns out that for a significant numbers of users it is not. But only if the product is good enough to justify the cost.

That’s an important factor for publishing people to consider when they find themselves thinking “but nobody will be willing to pay”. It is surely true that persuading people to pay for a product which has been optimised for being free, and in the process become unsatisfying and hostile, is tough. But it’s not a generic truth that people won’t pay.

People will pay. They’ll pay for anything for which their desire exceeds the cost being demanded – whether it’s media, groceries, cars or jewellery. The amount of desire, the acceptable cost and the product might vary from person to person, but it is that basic equation which drives all consumer markets.

The task of the media is to bring cost and desire for their products into line.

If the cost has to be more than zero in order to remain in business, what has to happen to the product to make it viable? Self-evidently it has to be attractive to enough customers. That probably involves more change than simply putting a price sticker on it. But where there’s a return there’s a business plan. Investment to make the product better is justified by the improved bottom line that stands to be gained.

Lastly, what about the cost? The Times and others have shown the way by creating a high value product that sells, to hundreds of thousands of people. They have found a lot of people willing to part with a fair amount of money every month because their desire for the The Times exceeds the cost being asked.

It isn’t cheap, though. The Times is most certainly a high-end product aimed at affluent individuals. That’s why the subscription base is somewhere below 10% of the people who want might otherwise choose to read their product. The other 90+% just have to be ignored, or, in some cases given a certain amount of free content in order to tempt them in.

For other publishers, with larger and less affluent or less committed audiences, the investment in making the product more desirable has to be justified by a price much, much lower than the subscriptions currently doing so well at the very top of the market which appeals to a much broader demographic.

Lowering that cost and creating really huge new sources of revenue and profit is the next challenge.

Which will be the subject of the next blog…

 

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Were newspapers wrong about online? Kinda…

Oct 19, 16 10:32 PM

Were newspapers wrong to go digital? asks Roy Greenslade, reporting on some very interesting research from the USA. He points out that many, if not most, newspapers could be more profitable if they closed their websites and just focused on print instead.

I don’t think the mistake was going digital, unless any newspaper had obsolescence as its long term plan. However, it’s hard to ignore the unvarnished reality that almost everything newspapers have done in the digital sphere has been a commercial failure.

The challenge now is not to ruminate on what could have been, but to recognise the mistakes so they can be learned from. They can still be corrected.

Two key imperatives

There are two key strategic imperatives which can help answer the conundrum. They are generally valid not just for newspapers and not, in fact, just in the digital sphere, but all media products.

Firstly, popularity must lead to success. In the case of newspapers, that needs to mean that the more you’re read, the more money you make.

Secondly, you must maintain reasonable control over terms of trade. You need to decide how much you sell your product for to the next person in the value chain. If someone else decides whether, and how much, you get paid you cannot build any kind of sustainable business.

So, for newspapers, the mis-steps are obvious when viewed with these two imperatives in mind.

There’s nothing wrong with the idea of charging

Newspapers, nearly universally, abandoned the idea of charging for their online products. Although this led to a huge increase in consumption, it did not (and still does not) lead to a commensurate increase in revenue. Popularity no longer delivers revenue, yet they keep chasing popularity as if it does – frequently making their product horrible for readers as they go.

Looking for the reasons for this,  a big one is easy to find in the way the online advertising market works. Newspapers have next-to no influence over the quantity of advertising their sites can sell, nor the price it gets sold for. Achieving flat revenues year-over-year is regarded as a decent outcome by most of them, even if traffic has increased.

Can it be fixed? Yes it can!

What could they do differently, even at this late stage of despair? Sustainable success is still achievable if they can re-build the link between popularity and revenue, and regain control over their terms of trade/

One thing, obvious I think, is to charge for access to their products. There are loads of reasons why this is a good idea not just for newspapers but also for their readers, starting with the fact that it can deliver both strategic imperatives.

Before this seems like the right, even obvious, thing to do, newspaper managers have to accept that traffic is not the same as money and stop judging themselves by meaningless and mostly implausible numbers of “uniques” or other similar metrics. They need to train their staff and their investors to look somewhere else for measures of success, starting with the bottom line. Profit is not a tawdry or embarrassing objective.

Make something worth paying for

Having done this they need to come up with an attractive product. This means more than just slapping a price sticker on the thing they have now.

Current products have evolved in a search-optimised, ad-funded, traffic-hungry, revenue poor environment They aren’t really built with the readers’ delight in mind and are, as the US research points out, almost universally “less-than-satisfactory”.

Newspaper reading has traditionally been driven by habit. Making a habit-forming product, rather than just a data feed for search and social, which people return to every day, is central to success.

A big re-think is needed to create truly engaging, habit-forming, delightful products. There are already products which show the way. Subscribers to The Times, a subscription product built around the needs of users above all else, wlll tell you how much they like and enjoy it. That’s in no small part because a product created with the goal of delighting humans instead of search engines and social platforms is, well… delightful. People want to go back to it.

Price it right

When they have worked out their nice new product, newspapers will have to come up with an attractive price as well. The question is not whether customers are prepared to pay, but how and how much are crucial.

Subscriptions are a dreadful solution to this because they demand commitment from a group of notoriously mercurial customers. Newspaper readership is a casual thing, people change their minds, they switch around, they read more than one thing.

Even if someone forms a habit around a single newspaper, they don’t like to feel that they’re locked-in. So, demanding commitment, making your customers promise to pay you not just now but into the future as well, is unattractive to most readers.

You can achieve a measure of success with subscriptions, as The Times among others has shown. But you leave an awful lot of opportunity and audience on the table. There are better ways, and I’m building one of them.

Have a business plan you can believe in

Once you have your attractive, reader-centric, product, and you’ve got your pricing sorted out, and you have a nice user experience, and you have stopped talking about your product as if it’s a high security zone (a “pay wall” to keep the riff-raff out), you will discover you can write a fairly confident investment case.

Knowing how much revenue you stand to gain as your product builds popularity means you can work out how much to invest in the product, in marketing it, in the content.

In other words, you have a business.

Not only that, you have the ad revenue on top. Unpredictable it will remain, but it will also in future be secondary. You can put it towards the christmas party.

Be confident

“Ah yes”, I hear the cry. “All sounds very nice but if it was that easy it would have happened by now”.

Whoever is shouting that is committing the greatest sin that the newspaper business has been guilty of in the digital era: a lack of self-confidence and an obliviousness to its own power and influence.

Perhaps because the print market was so mature and didn’t offer much incentive to take risks, perhaps because there have been no genuine strategic challenges for decades, perhaps because the intense short-term focus of the newspapers distracts everyone from thinking about the future, but the newspaper sector has developed an actual aversion to innovation.

They claim to be innovative, like all businesses, but they are not. For newspapers, innovation means following the herd, jumping on bandwagons, doing what everyone else is doing. Copying a seemingly successful tactic you have seen elsewhere. Buying a drone for your CEO and saying “look boss, this is what the cool kids are doing, do you feel cool now?”. It’s fun to play with others people’s toys but ultimately it hasn’t worked.

If there is one reason above all others for the mess they have got in, it is a lack of courage to believe in themselves, an instinct to treat with suspicion any idea which someone else hasn’t already delivered.

This is what has put newspapers in thrall to new platforms whose interests are in no way aligned, but who are younger, cooler and richer.

Doing something to shape the digital landscape into one which works for them is something newspapers haven’t really tried to do because they don’t think they can. But the landscape others have built isn’t one in which they have thrived.

Yes, you can. Really.

If newspapers are finally ready to abandon their defeatist self-pity and act confidently they can still reverse their misfortune. On the other side of it they will find a far richer opportunity than they have ever imagined.

They need to believe in themselves and their ability to product great products which – human – customers love and will pay for.

One more thing…

There’s one other bit to making this work, of course. They all need mechanisms capable of delivering the money in a way which doesn’t make paying for their products more trouble than its worth.

I’ll help…

That’s what I’m working on. I can see the money, the opportunity and the way to deliver it. I’m working with a group of gratifyingly receptive and non-defeatist publishers, as well as some other media companies, to develop it in partnership. We will be launching the first products in the new year.

If you’re a publisher of any kind of media product, or a creator, you will love it because it will connect your popularity with revenue and give you an opportunity to develop, grow and attract investment to your business.

If you’re a user you will love it too because you’ll be in charge – you’ll be able to access everything and because everyone will be competing for your money, they’ll also be competing to make the product and offer you love enough to pay. You’ll be the customer again.

If you don’t believe me, or want to pick holes in my logic, or want to understand my reasoning in more detail, or want to just tell me how wrong I am, get in touch and lets talk.

So, Roy, going digital was not a mistake for newspapers, but the failure to innovate and drive their business rationally most certainly was. That, however, can change.

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Tis but a flesh wound

Feb 18, 16 4:51 PM

Much has been written in the last week or two about the death of newspapers. The announcement that the Independent will cease its print edition has prompted this hand-wringing and outpouring. The Independent’s hobbyist owner, Evgeny Lebedev, has offered up his own wisdom about the situation. In an interview with the Guardian he claims his rivals are “in denial” about print.

“I genuinely believe that the future is digital and that the industry is in denial…” he says, positioning himself as the pioneering leader of an otherwise moribund pack.

I chuckled when I read this, in the patronising way only a long-in-the-tooth, seen-it-all-before old dinosaur can. Evgeny is not to be ignored, and he has done some interesting and innovative things, but he could easily be accused of a certain amount of denial himself.

While print might be a rapidly declining market in both circulation and advertising terms, it remains the case that for certain newspapers print is still profitable.

Not, I agree, for everyone, and if you were the proprietor of a newspaper selling around 50,000 copies a day in a national newspaper market which manages to sell nearly 7m copies daily, carrying on would have started to seem irrational quite some time ago. Being in last place, with under 1%, isn’t exactly a glorious place to be in any market. In a declining market, less so. In a declining market with high overheads and reducing yields, less still.

So fine, Evgeny, shut down your print titles. Can’t imagine why you didn’t do it years ago (unless, of course, the reason why a mysteriously wealthy Russian former spy buys a failing British newspaper isn’t just because he’s interested in the bottom line).

But Evgeny’s digital dream is almost comical. For the Independent to have a future, digital or otherwise, it has to have an income. Ideally, unless it plans to rely on charity, it should have more income than expenditure. Which as countless newspapers have found, is a bit of a challenge in the digital domain.

It’s not like the Independent is the first to try this, but the precedents are not good. Going “digital only” is a usually prelude to going bust or carrying on in name only, trying to attract enough traffic to bring in a dribble of cash. That’s because “digital only” tends to mean, other than in niche areas, ad-funded.

Unfortunately ad-funded means a rather unreliable revenue stream, since increased traffic only converts a fraction of the increase into meaningful ad revenue. It also means a rather uncertain future because the online ad marketplace is one largely out of the control of any site which is seeking ad revenues. If you’re running to stand still, you’re doing rather well.

So success as an online newspaper is elusive. As so many have shown, it’s relatively easy to drive audiences to numbers which dwarf print circulations. What’s much harder is to convert those audiences into profitable or even meaningful revenue streams. So the usual approach is to try to cut costs, to acquire audience for the minimum possible investment, or keep spending and produce a fantastic product sustained by the hope that popularity will eventually deliver meaningful revenues. Just ask the Guardian and the Daily Mail how well that works out in practice.

Which means Evgeny’s high-minded promises to retain the services of high priced journalists and foreign bureaux are unlikely to survive the brutal reality of the digital only world for long. If he really believes that this transition, and the promised re-investment of freed-up capital, will lead to growth then he’s either talking about growing something other than profit, or he’s a fantasist.

The truth is that until the internet grows up enough to deliver meaningful, reliable revenue from online audiences, this sort of transition will continue to end in failure. Giving up print is simply giving up. For the Independent, which has struggled to commercially viable for much of its existence, it might be finally succumbing to the inevitable

It’s a very sad day because for all its failure the Independent has been a great newspaper, editorially proud and brave and with lots to admire. At least that’s what plenty of people I respect say. Personally I never read it much. Which I think probably explains the problem – I wasn’t alone.

Not enough people wanted to read the Independent. That’s why it failed. When the digital life support machine is finally turned off it will be the end of a painfully prolonged death. If Evgeny wants to invest in anything, in the meantime, he should try to make it something which might actually change the online marketplace into one where it’s possible for newspapers and other content businesses to thrive. That’s what I have been working on.

But that requires a strategic vision which extends beyond just brave and unrealistic rhetoric.

Farewell, the Independent. You were great. Rest in peace whenever you are finally allowed to.

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Fearlessly speaking common sense

Jul 2, 13 1:43 PM

I have often made the observation that for the business of media to work well commercially, there has to be a link between popular success and commercial reward.

One of the great frustrations of the internet has been that this is, largely, no longer true: even staggeringly popular sites like MailOnline (117m monthly unique users) earn pitiful revenues (£20m for the half year to March 2013).

This is partly to do with the internet, the changed rules of the game which produce perverse outcomes all too often, and about which I have written much.

But it’s also to do with the tactics many of the media players have adopted in the game.

Despite years of failure, despite other winners clearly emerging, despite years of data and obvious simple logic which show it can’t ever work, the strategy of many media brands has been to treat popularity as an proxy for commercial success, whatever it costs. Earning money, if it puts consumption figures at risk, is deemed too risky to try.

Even in the old world, though, there were trade-offs. It was still possible to undermine your business by being too cheap, screwing up the balance between reach and commercial return. Popularity was important, but not at any price. The bottom line mattered more.

So, for example, while free media products existed and still exist, many of the most successful sacrificed some of the reach they would have obtained from being free for the greater commercial strength of being paid by their users.

In other words, even in the past popularity was a central goal but not the only one. Common sense, intelligence, flair and a hard nose were always needed to get it right.

All of which have been notably lacking in many erstwhile rational players’ approach to the internet.

So it’s refreshing and to see one of the masters of the media game saying some controversially common-sensical things in public.

Mike Darcey, new CEO of my former employers News UK (née News International) made a speech last night and said some things which, despite their seeming… well, almost banality, are so counter-cultural that they are still capable of being controversial in some quarters.

For example, Mike says:

there are real problems with giving your product away for free over the Internet

A little later he tackles one of the reasons some people find this comment so controversial:

Some people have argued that the problem with a pay-wall strategy is that you lose reach, while others who maintain a free web presence continue to enjoy large numbers of Unique Users and Page Views.

To which I say: to what purpose? – this reach doesn’t generate any meaningful revenue, and the pursuit of it undermines the piece of the business that does make money.

So if your purpose contemplates still being here in 5-10 years time, then the choice seems clear: it is better to sacrifice reach and preserve sustainable profitability.

Moreover, when we sacrifice this so-called reach, what have we really lost?  A long tail of passing trade, many from overseas, many popping in for only one article, referred by Google or a social media link, not even aware they are on a Times or a Sun website, wholly anonymous.

That passing trade was good for the ego, if Unique User stats do that for you, but they don’t really add to our purpose at all.

It’s only a short speech, but it contains within it a large amount of good sense, which other media executives would do well to think hard about, resisting their natural instinct to dismiss their rivals.

Hopefully the whole thing will end up online soon, in the meantime here are some links to coverage which includes other quotes.

UPDATED: News UK have now put a video of the speech on their website here

Media Week

Dominic Ponsford in News Statesman

The Guardian

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The French fancy making life hard for Google, but are they kidding themselves?

Nov 1, 12 10:52 PM

After the revelation that withdrawing from Google News seems to do little (if any) damage to publishers, Eric Schmidt has been in France trying to persuade the President not to allow news publishers to charge Google for including their content on Google News.

Google says such a move would “threaten the very existence” of Google. A feeble protest, and an overblown threat. As if anyone thinks such a thing could kill Google; but even if it could why should anyone care? If Google isn’t smart enough to know how to innovate their way past challenges then maybe their days are numbered anyway.

Google also say that if the French persist with this they will just stop including French content in Google News. Based on the Brazilian experience that’s not much of a threat, since the French publishers probably wouldn’t feel much impact at all.

More intriguing is why the publishers don’t just withdraw their content rather than ask their government to get involved. They can do it any time they like; nobody forces them to be included in any Google search.

It might sound like a wizzard wheeze to get the law changed to force payment but there’s a flipside. If such a condition is imposed by law rather than negotiation, it could end up making Google’s access to their content a right, as long as payment is made.

I think control should stay with publishers, they should set terms and prices, the government should provide the framework within which they do so and then stand well back.

As soon as government start interfering, treating different categories of content differently, setting prices or terms or anything else bad things happen. The market, such as it is, gets locked in to a particular way of working and it destroys future innovation and competition. And this market hasn’t even got started yet, we shouldn’t force old age on it quite yet.

I know French (and German, and other) newspaper industries are desperate for revenues, and easy quick ways of getting them are attractive, but this sort of thing is a last resort. Traditionally they are reserved for when everything else has failed.

There are a few things to try first. Here are some suggestions for beleaguered newspapers trying to work out how to deal with search.

Be brave.

Withdraw your content from Google News. Maybe even from Google search (leave enough behind so people searching for your title can find it). And other search engines too. Since you get so little money from those sources, you’ll be risking little. And you can turn it back on easily enough.

If a search engine offers to make it worth your while to include your content in their product, negotiate with them. Do a deal which works for you – payment, helping sell subscriptions, ad share, whatever.

Tell your readers about it, why your content is in one place and not another. Point out the gap in the results they get from the search engines which don’t want to do a deal.

If none of them want to pay you, use them to deliver what you need, not what they need. Put enough stuff in them to attract the attention you need, and no more. Experiment with the best way to do that, and constantly refine your approach. Use other channels and relationships to attract users. Ask your users to pay, and work hard to make sure your product is worth paying for. Spend your SEO budget on other kinds of marketing, or just save it.

Just do something. Stand up for yourselves and the value of what you do.

Make a market.

Stop being so impotent and stop asking governments to load the dice in your favour.

The law you need is already there; just start using it.

Comments (1)

Saying no to Google News: common sense or suicide?

Oct 22, 12 11:35 AM

Brazilian newspapers have, en masse, withdrawn their content from Google News.

The response, not least from Google itself, is the usual mix of unhelpful and self-interested grandstanding. Google’s comparison of themselves to a cab driver bringing customers to a restaurant is particularly absurd, since most restaurants want customers who can pay, and aren’t interested in being flooded with people who can’t or won’t.

For me, the best thing about this move is it will create some real evidence which can be used in place of all the posturing and crystal-ball gazing which normally accompanies any discussion of the merits or otherwise of having content in Google search results.

The bald facts are pretty stark for most newspapers.

If they’re ad-funded, the majority of their revenue is generated by a relatively small proportion of their users. More traffic does not mean more money, necessarily.

Traffic from Google, or Google News, is of varying value and in many cases a large proportion of it is close to zero value to the newspaper. It neither delivers a significant direct income from ad sales, because of excess inventory, nor does the user go on to become a loyal and frequent visitor. Often, users are satisfied with the content they see on Google News and don’t visit at all. Even when they do, their next move is straight back out of the site again – so called “drive by” visitors.

Last time I looked at actual logs it was clear that the visitors most likely to become loyal were ones who used your actual newspaper title in their search terms. In other words having your home page in search engines was enough to target the most attractive potential visitors.

So if your goal is to focus on those users who might become loyal and frequent, high-value, visitors (the actual paying restaurant customers, in Google’s analogy), you might want to experiment with trying to control who comes and who exploits your content. In the real world it is called marketing, knowing your customer, having a strategy for targeting the people you’re most interested in. Withdrawing from Google News, given that so little revenue accrues from it, is a low risk thing to do and will potentially deliver much valuable data to help separate fact from speculation.

If, into the bargain, Google values your content enough to really want it, then maybe they will sit down and discuss a deal. If not, nobody has lost anything, and once you have learned enough you can decide if, how and when to put some or all of your content back into search.

I look forward to seeing what happens, and am pleased to see someone actually do something instead of just endlessly talking about it.

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