When news people lose sense

Later note: Please see Howard Weaver in the comments, who says I got wrong what he was saying.

Financial Times editor Lionel Barber predicted that “almost all” news organizations will be charging in a year just because they need to. Meanwhile, former McClatchy news exec Howard Weaver thinks that news orgs should get, oh, say, 10 percent of Google et al’s revenue because they, oh, should.

Amazing how news people lose their sense when they talk about news.

Let’s substitute GM for newspapers in this discussion.

Would Barber ever suggest that GM would charge more just because it needs to, with no consideration of the market forces and its competition? Would Weaver ever suggest that GM should get 10 percent of Toyota’s or Zipcar’s revenue just because, oh, it should?

I just spent two good days at Best Buy headquarters in Minneapolis talking about What Would Google So? and it was so refreshing to be in the company of a company facing the future bravely without whining like newspaper people do. One executive quizzed me, puzzled about why newspapers are so resistant to change. We talked about their sense of entitlement.

In what other industry do companies feel entitled to revenue just because they used to have it or they think they deserve it because of who they are?

But newspapers think that companies that served their customers better – Google or craigslist – owe them money because they lost those customers for serving them badly and ripping them off for years. They think that government owes them protection via copyright law (shall we look up how those papers editorialized about protectionist tariffs?).

It makes me look at the FT’s coverage of other industries in a different light. A dim one.

: SEE ALSO: John Temple tells newspaper people to stop blaming Google. Mark Potts tells Barber why he’s wrong.

: LATER: Like Temple, Chris Tolles does a better job than I do answering Weaver.

  • Jeff — I didn’t really get the impression that Howard Weaver wants to just have Google give back 10% of its revenue to newspapers. I think he thinks newspapers, just by the spirit of competitiveness, will somehow get that 10%. I like his spirit and the fact that he quantifies journalists (i.e. the algorithm can’t determine accuracy, ethics, etc. but professional journalists do); however, I don’t think he understands that just “throwing down the gauntlet” will NOT get anything done now. The landscape has changed – which you understand and preach.

    I think “competition” will further destroy newspapers – they need to find a way to make money by being the middleman. For other industries that have a sense of entitlement, look at any business or business-sector that believes they are the top, the only way, and/or the be-all-end-all of information (or the way to get things done). There are plenty of individual businesses out there like that, but maybe no industry that is as much like that as the newspaper industry.

    Sadly, education is trending towards this attitude. While I don’t necessarily like or value online education to the extent of brick-and-mortar education, I do see it as what is “next.”

  • Sadly, the UK is in a terrible state at the moment with a “unelected” Prime Minister, MPs expense scandal and every media organization going after each other.

    This had lead to a Weimar Republic situation, where “senior people” think they can “buck the market” and make pronouncement to the same.

    The FT comments are very much in line with the Licence Fee “top slicing” (give BBC money to ITV to make regional news, and pay for digital radio and several other things) which is crazy and will go away when sense returns.

  • PXLated

    Slight correction – BBY is headquartered in Richfield, MN
    Was part of a small swat team brought in to take BBY to the net in 2000. Always found them open to change and willing to move forward. While being recruited a couple of things won me over, both from Brad Anderson (Pres.)…
    We’re a little late to the net but now that we’ve made the decision, we want to kick everyones ass.
    Asked him why us, we have no retail experience?…
    That’s why. You can question everyone and everything.

  • The entitlement mentality. It’s not only endemic inside media, but also society. I’m certain government will figure out a way to fix these problems too.

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  • Did you even read my post, Jeff? Your summary is both entirely wrong and insulting.

    Andy Scheurer (above) read it. It is the opposite of entitlement; I am calling on newspapers to compete with Google by offering a better product. You may or may not think that’s possible, but why would you oppose it?

    “Because they, oh, should”? Could you be more inaccurate?

    I’m not calling on Google to share anything. I’m calling on newspapers to compete and take some of that revenue back. The aggregators won’t say exactly how much is derived from news, but it’s a huge sum. (If it’s not, we’re all fucked anyhow).

    News companies don’t have to give up anything to compete. Google can keep indexing and presenting its results exactly as it is. We can keep making money off the traffic they send us. God bless them for it.

    But we also need to capture the money *at the front end of the distribution curve.* Google (and the others) collect 100% of their ad revenue based on being the news distributors online.

    We will win NOT by walling off our content, but by presenting it in a way that consumers will prefer. We have to play the same game AND PLAY IT BETTER.

    I think I can make this simple: It’s journalists versus algorithms, John. I think journalists will win that fight if we can get them on the same playing field as the aggregators: big scale, world-class tools, tech-savvy partners.

    We’ll practice link journalism and see if we can put together a more useful aggregation that Google does. What don’t you like about that? I’d really like to know.


    • Howard,
      I’ve added a link to the top of the post now referring to your comment. Sorry if I got it wrong but I’m still not clear on a few points. First, as Bradley says later, Google is not a competitor insofar as it sends traffic to news organizations and – as I’ve said in my outlines of the imperatives of the link economy – it is up to he or she who gets the links to monetize them (though Google can help with that, too: see About.com). I also cannot believe your numbers on what Google makes from aggregation of news. Third, I’m not sure what you mean by competing with Google. Please set me straight.

      • Easily, Jeff; thanks for thew opportunity.

        Tolles et al aren’t addressing my thesis; they’re challenging the numbers, which may not be right but surely amount to substantial, material amounts.

        I love Google search referrals and the money news sites can make. No need to change a thing there. God bless Googlejuice, and may we find more.

        Google also makes money when it returns news as the answer to other search results. Why would they put a cluster of news results atop the search return otherwise? In my second, followup post at editor.blogspot.com I elaborate on that. There are a couple of examples to click in that post; please click one. If those searches were done on a news site run by or partnered with news companies, they would keep that “front end” distribution money as well as the referral money.

        The heart of my thesis is this: we want to meet a consumer need Google doesn’t: filtering, verifying and sorting an avalanche of news for busy people who don’t want results like those on Google News. As my first post noted, Google CEO Eric Schmidt told the NAA last April, “We have not come up with a way to algorithmically handle that in a coherent way.”

        Maybe such a site wouldn’t prove a winner, but suggesting news compoanies leverage the journalistic judgment of its staff doesn’t seem like an evil or naive or “condescending” suggestion to me. Please note that this is the opposite approach taken by Tolles, for example, in providing just that avalanche of undifferentiated data. Maybe he’s right and that’s what people prefer. Maybe both can be true.

        As I said, I honestly expected to be on the same page as you here: not nitpicking trees but looking at the forest here – a chance to innovate and earn revenue by meeting an audience need.

        Most of the folks who criticized this — as you did, originally — tagged it as an entitlement whine, suggesting Google “owes” us something. Couldn’t be farther from the truth, but I think that’s why several people pounced.


      • Jeff, tangential to your point (but, I think, relevant to the discussion): It’s worth noting that companies can be both beneficiaries and competitors. For example, consider Apple and Microsoft: they compete, fiercely, in operating systems. But they also benefit from each other, in applications – MS sells Office on the Mac (and makes a lot of money from it), and Apple benefits from having Office on the Mac.

        Google and most media organisations are in a similar position. As I’ve noted below, unless the existence of Google can be shown to have grown the overall ad market (and note this must be Google *specifically*, not just online in general), then Google’s slice of the advertising pie has to come from somewhere. That makes them a competitor with media organisations for ad revenue.

        But clearly, Google also benefits media organisations by sending them traffic. How to monetise that traffic – if, in fact, it can be monetised effectively and is valuable – is a problem for the media organisations to deal with.

        The fact, though, remains that whether Google is “good” or “bad” for someone else’s business is a complex question which isn’t easily answered by a simple yes or no. Without running detailed numbers, no business can or should assume an easy answer either way. There’s plenty of opportunity for a win-win – but working out the details is best done on a company-by-company way.

      • Andy Freeman

        > Google also makes money when it returns news as the answer to other search results.

        Correction – Google (search) ONLY makes money by having a history of returning relevant results. News is not special, different, what have you.

        > If those searches were done on a news site run by or partnered with news companies, they would keep that “front end” distribution money as well as the referral money.

        Why would someone do “not news” searches on a news site?

  • steve

    i guess since sherrod brown has decided to recuse himself from his wife’s folly he’s off to the next thing for the gov’t to f-up– see his piece on huffpo today.

  • “I’m calling on newspapers to compete and take some of that revenue back.”

    Mr. Weaver:

    — You can’t take something “back” if it was never yours in the first place.

    — Google is not your competitor. It sends the media traffic they haven’t “monetized” effectively.

    — And anyone can say newspapers should offer a better product. Spelling out how this is to be done requires some actual rigorous thinking.

    “Link journalism” is a nice idea, but it’s really rather late in the game for newspaper executives to be discussing how to use links, a fundamental principle of the Web. And when you say, “journalists will win that fight if we can get them on the same playing field as the aggregators: big scale, world-class tools, tech-savvy partners,” you’re not providing any profound insight. You’re just throwing out a lot of buzzwords.

    Google isn’t the problem, it’s the utter mediocrity, timidity and unimaginativeness of the upper ranks of most newspaper companies. Why don’t you address that problem?

    • Bradley:

      “You can’t take something “back” if it was never yours in the first place.”

      The unquestioned assumption you’re making is that the advertising revenue which Google makes was previously not being spent – in other words, that Google has grown the overall ad market. I’m not convinced that’s the case, but if you have figures to support that, then I’d love to see them.

      If Google hasn’t grown the overall advertising “pie” then, clearly its share of ad revenue has come from somewhere – and that “somewhere” could be from newspapers (note – *could be*, not *is*. I don’t have the data to say either way).

      • Ian,
        I’m not assuming that at all. I’m pointing out that the MSM never owned those advertising revenues to begin with. The monopoly press grew used to thinking they had some sort of divine right to advertising money. Weaver’s statement of taking it “back” reflects that barnacle-encrusted monopoly attitude. You won’t find Google, Yahoo or Microsoft thinking that way.

  • Biff Larkin

    Howard Weaver makes incorrect assumptions: that journalism is a profession and that the skill set of your average employed journalist is worth much in the marketplace.

    That is why journalists are so desperately reactionary. Because they know they know that once they lose their high paying journalism sinecures, they will have to go out in the marketplace and compete.

    • If you think journalists are reactionary, Biff, you’re talking to the wrong journalists. Some of us have been working online for a long time – my first online editing job was in 1997, and I’ve happily switched between print and online since.

      • Ian,
        You may be an exception, and I know of many talented, entrepreneurial journalists. But they don’t control the news industry. It’s controlled by executives who think of journalists as interchangeable widgets, and won’t pay for real expertise. They recite boilerplate about the importance of journalism, but their own actions belie it.

        Most top news executives view their journalists as an inconvenience, an expense center that reduces their profit margins. They are mostly concerned with getting the most money for the least possible expenditure. They are mostly clueless about the Internet and impose Dilbertian restrictions on those beneath them in the hierarchy who do know. So often the best journalists leave for places where their talents are better appreciated and compensated. And since they don’t understand or have a passion for journalism, these executives don’t really care about shoddy, shallow coverage or errors, unless a libel suit is involved. Just write about kittens and puppies and other lowest-common-denominator stuff.

        Do you really think these clueless clowns are going to admit their incompetence and step down for more qualified people?

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  • Eric Gauvin

    As a consumer of online content, I look forward to a day when there are innovative alternatives to accessing content that are not search-centric. I hope we’ll someday look back on this period with nostalgia about how we innocently searched for everything through google.

    My opinion is that an infatuation with google’s style drives a lot of it’s dominance, and google seems to spend too much time defending and explaining it’s purpose. To me these are signs of an opportunity for innovation.

    Random video of Eric Schmidt rambling on about google’s awesomeness “…google is like the weather. It’s always there. You can’t live without it, we hope.” (that’s not innovation)


  • Danny

    Newspapers can ‘stop Google’ at any point from indexing their web sites:

    yet none have?

  • James

    “In what other industry do companies feel entitled to revenue just because they used to have it or they think they deserve it because of who they are?”

    I can think of two right off the bat: government and medicine.

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