WSJ Chief: There Are Two Types: Creators And Aggregators - Creators Carry The Burden Of Costs
Hat tip to Danny Sullivan for pointing out the above panel at Web 2.0 Summit, which featured Robert Thomson, Wall Street Journal chief, and Marrissa Mayer head of search products at Google, plus Martin Nisenholtz, The New York Times Company, and Eric Hippeau from the Huffington Post, moderated by John Battelle. Title: "Whither Journalism."
The reason this discussion is interesting is because Mr Thomson is a close confidant of Rupert Murdoch, the head of News Corp and one of the leaders in trying to create new business models for online journalism. One of those ways is to create a paywall - to charge for content.
This has been criticized by many online pundits who believe content should be free and that Mr Murdoch, and others that want to charge for content won't succeed.
This is a ridiculous argument because it doesn't address the issue of how content is created and the costs in creating content. An army of citizen journalists won't be able to fill the gap caused by fewer professional journalists. We have to figure out a way to pay for professional journalism.
At the beginning of the discussion Mr Thomson gets to the point right away, when he makes the distinction between content creators and content aggregators and point out that the cost burden is being shouldered by the content creators.
Many people, like Danny Sullivan, like to point out that the Wall Street Journal, and others that complain about Google stealing their content, want the traffic that Google sends their way.
But Mr Thomson challenged Ms Mayer's view that Google is all about sending traffic to other sites. He said if that is true, why isn't the font size larger on the link to the original source? Double figure (font size) would be good, he said to laughter.
Google, and other aggregators, take the headline and first paragraph of a story, the two most important elements of a news story and try to monetize that content.
The value of the traffic Google sends is not that great, believe it or not. As a publisher I get to see my server stats, etc, and so I know first hand the value of traffic from Google, or even Techmeme, is not much.
I can appreciate the frustration that Mr Thomson feels when he sees others trying to profit from the work of his journalists.
Producing original content is very expensive. Trawling web sites and taking the headline and top paragraph of a story is dirt cheap. The difference between costs for content creators and content aggregators is very large indeed.
The Huffington Post gets a ton of content for free. The New York Times has more people moderating its comments than The Huff Post has journalists on its masthead. Yet the Huff Post couldn't exist without the content creators. Clearly there is a large mismatch here.
The tragedy is that on either side of the equation there isn't enough money to pay for the content creation.
Even if Google News and The Huff Post and all the other news aggregators gave every dollar and cent they make from other people's content to the content creators it would be unlikely that it would cover the costs of the news creators.
For example, The New York Times is laying off another 100 newsroom jobs and its most recent financial quarter showed a 29 per cent fall in revenues with print and online ad revenues continuing to plunge.
The tug of war between creators and aggregators is some degree, a red herring. We need to develop a "value recovery mechanism" for online journalism.
This is the most important problem we have related to the Internet, it is much more important than net neutrality. It is the Gordian knot of the Internet - if one person solves it we all benefit.
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I was reading an interview with Bay Area philanthropist Tad Taube. He is asked what other things would he like to fund...
"There is one thing that I've been thinking about a lot, but I'm not quite sure how to do it yet. One of my principal concerns is the preservation of freedom in the United States. Now, in order to have a free country, it's necessary to have a free press. A free press is a press that is ready, willing, and able to present all the different points of view that bear on an issue. If people are not informed in an impartial and unbiased manner, if there is only one point of view that they ever hear, how can they possibly make a decision that was in the best interest of their country or their civilization?
What I would like to explore are ways to distribute and influence the body politic with much more balanced reporting. So how do you create that? I'm not sure yet. It won't be easy. It will take a lot of people--this is another area ripe for philanthropic collaboration, I would say--working together to bring balance back into the media, particularly in its political coverage. I'm sure there is more balance in terms of basic news: political turmoil in the Congo or a fire in downtown Boston, or reporting on a sporting event. But coverage of politics, economics--of ideology, of ideas--is badly unbalanced. And, ultimately, we live off of our ideology. "
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