No more alphabet-soup news

CNN is heading 180 degrees in the wrong direction with its attempt to start a wire service to compete with the Associated Press, I think. CNN is just trying to amortize the cost of its existing coverage by reselling it and it may find a few clients. But I’m dubious because newspapers and news sites are canceling every syndication contract they can (I did that six years ago when I worked on sites). Yes, CNN might undercut the AP, but since it takes two years to cancel an AP contract – and because newspapers have an ownership stake in the AP and because there is volume and quantity there – I don’t see CNN taking over a critical mass of AP business quickly.

But there’s a much, much bigger strategic mistake at play here:

The syndication model is dying. As the content economy is supplanted by the link economy, reselling the same story over and over again becomes increasingly impossible.

What’s needed instead is an infrastructure to share and link to original journalism. Newspapers in Ohio are doing that now. Newspapers in the New York area have said they’re working on something similar.

That network could have been created years ago when newspapers created the doomed New Century Network but it died because they wouldn’t give up control or get along. But today, they’re desperate, absolutely desperate, to save any penny by using someone else’s stuff. No longer complaining about aggregation, they must aggregate themselves.

Many players can create the infrastructure that enables newspapers to share and link to their original journalism. (and, full disclosure, I work with one of them, Daylife). But they don’t even need infrastructure to get started. All they need is email or links and permission. That, I believe, will undercut CNN’s effort to undercut the AP.

CNN is holding a meeting of newspapers editors in Atlanta this week to sell them on the new wire. If I were there, I’d gather my colleagues over drinks and form my own wire service, for free.

  • “If I were there, I’d gather my colleagues over drinks and form my own wire service, for free.”

    Or, to put it another way, rewind and reset the AP.

    After all, isn’t the AP (supposedly) a consortium of news organizations sharing resources? Weren’t their biggest selling point until a few years ago:

    1. Organizing these widely-dispersed resources and
    2. Providing a reliable means of sharing those resources. AKA, The Wire.

    Given that #2 is no longer necessary thanks to the internet, the AP would be wise to reset itself as a multi-tiered organization focused on #1, sharing. Otherwise, as you say, its replacement could easily be diagrammed on a cocktail napkin.

    If they don’t do it, you or Daylife or Publishing 2 or (god help us) NCN2.0 will.

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  • Working Reporter

    How would you expect the revenue stream from a “link economy” free distribution service to compare with a traditional syndication model? I’m assuming your model would not involve CNN charging for the use of its material.

    If you have any actual numbers, I’d be interested in seeing them.

  • Jeff, there’s more here than meets the eye. That’s all I can say right now. Stay tuned.

  • Bob Jakuc

    The problem is not the cost of the content, no matter what stories like this:

    have to say. Granted, right now things are so bad at most papers that any cost savings will be welcome. And note that the AP responded by cutting fees paid by newspapers by $31 million for 2009.

    The problem is that even if AP content to newspapers was FREE, most papers would still be doomed because people 18 – 34 years old, especially the digital youth, that dream demographic, don’t read newspapers. PERIOD. Old people do (like me, I’m 51) but young people don’t. So most newspapers have an aging, dying, shrinking market. Craig’s List stole their classified business. Media buys by print advertisers tanked when the DOTCOM bubble burst and haven’t come back.

    The writing was on the wall 3 years ago when the American Society of Newspaper Editors:

    did a year long study and found out that 90% of people in the 18 – 34 year old demographic don’t read newspapers for news and never would even if the newspapers were GIVEN AWAY FOR FREE! You’re in trouble if FREE can’t attract young new customers. The 24 hour news cycle and, ironically, breathless, blow by blow coverage by the likes of CNN has people wanting their news NOW, not tomorrow morning with their bagel and coffee. News consumption happens now in real time as events occur across multiple delivery platforms.

    A handful of large papers will survive in part because they’ve been able to fund and develop their own successful websites that have become destinations in and of themselves for people looking for news. Also in part the big boys can afford to have a reporter or *reporters* work for months on a story and take the time to do the deep background stories on complex issues like the current financial crisis, something that newspapers still do very well.

    But for most papers, the future lies in going “hyper local”… covering local news, events and local sports (mainly high school football and basketball) exclusively (and AP knows that). So that’s why there’s been lots of stories in the last 6 months about papers leaving the AP cooperative or creating new content sharing agreements (like in Ohio) because they figure why pay for content that no one is consuming anyway? Why pay for content we can’t give away? Newspapers have to blame somebody so they blame the AP.

    I think the AP leadership get this (Curley and Jim Kennedy, head of Strategic Planning) and are planning for a no newspaper future (or maybe just a few big papers). That’s why today revenue from newspapers is only 25% of AP’s total revenues. I bet 10 years ago, that number was dramatically higher if not well over 90%.

    Bob Jakuc

  • You write: “The syndication model is dying.” If that’s true, we’ve got a problem that needs to be solved…

    Links don’t generate revenue for those who link — only for those who are linked to. Thus, you end up with a serious “balance of payments” problem. Providers of “broad base news” (regional, national, international, etc) will be linked to by news sources that focus on local or hyperlocal content. But, broad-base destinations will rarely find cause to link back to the narrow-base sources. The broad base pubs will get rich while the narrow-base pubs go broke.

    bob wyman

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  • Bob,
    Yes, but narrow-base sources will save money by not having to create or buy content that broad-base sources now cover.
    And in a reverse-syndication model, the broad-base source can share revenue with the narrow-base source for the traffic it causes by sending traffic upstream.
    So the narrow-base source (can we come up with a better name for that?) saves money by reducing coverage or syndication and wire costs and even gets a bit of revenue and gives its readers the best content and supports journalism at its source. The broad-case source, in an SEO world, becomes the best source for broad topics.

  • Jeff, I’d like to dig in deeper on the subject of how revenues are generated with reverse-syndication… The simple model that you proposed in February may not be sufficient or complete.
    If the Times is linked to by the Grand Forks Herald, then a Herald reader is taken “off-site” every time they follow a link to the Times. Thus, the reader is constantly being reminded of the “site structure” of the news. This adds friction to the news reading experience and detracts from the idea of “article” at the center of the news. Also, Herald readers have different demographics than Times readers, thus, the Herald would have shown different ads than the Times does.

    Both problems might be solved by having the Times change the “skin” for their stories based on link source. Thus, a Herald reader would see familiar navigational elements no matter where links sent them and the Herald could sell local ads that would display on the Times site, etc. The reading experience would be smoother and more personalized, both sites would be able to sell ads that the other is unlikely to be able to sell, revenue splits would go both ways, etc.
    The result, for residents of North Dakota, would be the feeling that the local Grand Forks Herald was actually a more comprehensive source of news than the New York Times — since the Grand Forks Herald would contain all the content of the NYT and any number of other sources plus the local North Dakota news, with local ads, consistent navigational tools, etc…

    bob wyman

  • Bob,

    Yes, there are two ways to present the content: send the reader from Grand Forks to the Times (with ads there and revenue shared back) or send the Times content to the Grand Forks site (with a Times ad attached). I don’t know which would work better. I know which is the reflex of publishers: control. But I think you’re right that the context of the experience may be what matters – make my experience of the news more continuous, contiguous, browsable, consistent – not because I want either brand to control the experience but because I want some sense to the experience.

    The ad world will complicate this, of course. They’ll pay a higher cpm on the Times site even if the same reader may be reading the same content – but that can be overcome. Measurement services will be bad at counting a reader on Grand Forks reading Times content and giving the Times credit for that audience – but that’s a meaningless measurement (good only for bragging) and we’ll get over that, too.

    I’m not saying that this model works because it is unproven. But I will say that it makes more sense than old syndication in a link economy and that we need to try to test it and that we will see many more networks of shared content and this is one way to monetize them.

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  • Bob:

    You write “The broad base pubs will get rich while the narrow-base pubs go broke.” This will be true unless the narrow-based publications adopt a completely different role model as “information valets.” As custodians of the demographic preferences of their users, they can make money from referral fees (like commissions paid to a real-estate agent) as users move about the web going to broad-based pubs and to other places where they are rewarded for their attention, or where they must pay a bit (or be part of a subscription service) for premium content or services. This notion was discussed Dec. 3-5 at “Blueprinting the Information Valet Economy,” at the Donald W. Reynolds Journalism Institute. ( Didn’t we have this conversation in about 1995? You were right back then, and still are.