The half-life of news

At a Yale conference a week ago, Thomson Reuters CEO Tom Glocer talked about the life cycle of the value of news in his business.

When a piece of financial news come out, it is at its most valuable for a very short time, he said. I asked him later how long that is. “Milliseconds,” he replied. Milliseconds. That’s as long as a computerized trader has to take advantage of news before the market knows it, before the news is knowledge and is thus commodified and loses its unique and timely value.

Reuters still gets high value out of its news in stages, turning this tidbit into a headline and a story and selling it as part of its financial data services and then its wires. It finally lands on Reuters’ web site, visible to consumers, where Reuters collects ad revenue directly. That, Glocer said, is about 2% of Reuters’ revenue.

Of course, one can’t view this timeline in isolation. The news is being spread in all kinds of vectors: other news organizations get it and it’s masticated and repeated in print (slow), on broadcast (faster), on websites (faster), by aggregators (faster), by conversation (aka Twitter – getting faster all the time). The faster that distribution is, the quicker news becomes knowledge and thus a commodity, the faster it loses its unique, saleable value. And that chain is getting only faster.

And that, ladies and gentlemen, is one reason why trying to lock up the value of news behind a wall won’t work, in my estimation.

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  • True. On the other hand: Reuters makes a business out of the constant production of milliseconds. As long as you don’t stop doing that, you have an interesting model. The milliseconds themselves haven’t got much value, the chain of milliseconds is something else.

  • I agree with you Jeff – breaking news is a commodity business now. .

    MSNBC made a smart move by partnering with BNO News who publishes under @breakingnews on Twitter:

    BNO was started by a 20 year old in the Netherlands and now has an audience of 1.4 million. This is a brand nobody knew about two years ago but now has numbers that rival Fox News in prime-time.

    If a twenty year old with a Twitter account can gain an audience of that size virally, Murdoch’s old world assumption that his brand is king will result in disaster.

    • Lon: Breaking news is not a commodity business. That’s why Reuters is able to make good money providing “breaking news” — milliseconds faster than their competition. What is a commodity business is that which newspapers consider to be “breaking news” but which is actually “old news” by the time that it is provided to the non-professional consumer market.

      bob wyman

  • And that, ladies and gentlemen, is why the article — or the video package — is not a useful unit of journalism as it enters the long tail.

    Instead online journalistic content must be organized by topic. Merely repurposing a piece of print or television journalism in the format in which it was first disseminated in its initial news cycle offers minimal appeal.

    The long term online appeal of journalism in the long tail will derive from the insight it offers into a given topic — as an explainer, for example, or to make the story visually vivid, or to give it human interest — not its timeliness at the point of its initial production.

    Thus the greater the emphasis on gathering breaking news, the smaller the return on investment in the long tail.

    • An interesting stat: My hyperlocal video news startup in West Hartford, Connecticut gets 50% of our video plays from places other than our website. We send our content everywhere because we want to be where people are normally looking for their news.

      Aggregation needs to catch up, especially in the video space. There’s dozens of boxes that stream internet content to televisions, yet no standard way to get content to them. Everybody has their own standard, approval process, etc.

    • Andrew Tyndall wrote: “Thus the greater the emphasis on gathering breaking news, the smaller the return on investment in the long tail”

      This comment ignores the data in Jeff’s post. The traders and professionals who require breaking news in milliseconds are clearly long-tail consumers. It is clear that Reuters makes quite a return on their investments intended to serve this market. “Breaking news” is apparently a great business — but it is a business that is highly specialized and which enjoys very high barriers to entry.

      bob wyman

      • bob — Jarvis was making the point that the value of breaking news degrades rapidly so that content has little value in the long tail; the content that has lasting, not breaking value, is therefore unlikely to be repurposed commodity journalism — not what you call “tip of the iceberg” news but the “deep news” instead. The traders and professionals may require both breaking news and long-tail news but those two categories will not be one and the same. regards — andrew

      • Andy Freeman

        > The traders and professionals who require breaking news in milliseconds are clearly long-tail consumers.

        What definition of “long tail” are we using?

        The common definition is “long tail is low value transactions”. You can make a lot of money on low value transactions IF your costs are low enough. However, the breaking news/milliseconds counts transactions aren’t low-value – they’re high value.

        The above seems to use a definition like “long tail is low volume transactions”, but since the long tail is almost always associated with “there’s a lot of them”, that seems wrong.

  • The important thing here is that “Reuters … gets high value out of its news in stages.” They monetize news in multiple markets with distinct value propositions. But, the average “newspaper” generally attempts to make all of its money with a single product — general consumer news provided at a leisurely pace.

    The difference here is that Reuters is in the “news” business rather than the “newspaper” business. Their focus is on content in contexts rather than just on the medium used to distribute content. They seek to serve “interests” and satisfy needs rather than simply “publish a paper…”

    We must remember that “Reuters” isn’t just “Reuters” anymore. It is now “Thomson Reuters.” Thus, they do much more than just monetize the “tip-of-the-iceberg” news that newspapers rely on. Thomson Reuters is also one of the biggest providers of the *often very expensive* and hyper-focused “deep-news” demanded by the professional and special interest markets.

    The newspaper folk should look *very* carefully at the fact that “about 2% of Reuters’ revenue” comes from ad-supported consumer news… What they should be learning is that the revenue opportunities in deep, focused, fee-based news products are excellent. By putting more focus into developing deep-news products, today’s newspapers would be able to subsidize the cost of consumer news publishing.

    bob wyman

    • It looks like “deep news” has a lucrative audience on the Financial beat with five Anglophone conglomerates positioning to offer a blend of proprietary data, subscription journalism, ad-supported consumer news, and cable TV…

      Thomson Reuters
      Dow Jones-News Corp–WSJ–FOX Business
      Pearson–Financial Times–Economist
      NBC News–CNBC

      Note the absence of NYT, BBC, CBS, NPR, Disney, USAToday from this list.

      I wonder what other specialist beats have such pricing power. Sports is certainly a contender; maybe Politics; perhaps Celebrity-Shobiz. What about Healthcare and the Military-Industrial complex

      • Andrew Tyndall wrote: “I wonder what other specialist beats have such pricing power”?
        In the realm of science, we find:
        * Nature Publishing Group, a division of Macmillan that publishes over 70 journals covering the life, physical and applied sciences and clinical medicine. Of course, they also sell proprietary data, hold conferences, publish books, etc.
        * AAAS, non-profit publishers of Science Magazine as well as a host of other professional journals.
        In the realm of law, we find:
        * Bureau of National Affairs, publishers of deep-news in many areas of law, labor relations, environment, health and safety.
        In politics, we find:
        * Congressional Quarterly, with dozens of specialized and expensive products in the realm of national and state government.

        All of these publishers are making a very nice profit providing *news* to a variety of long-established and profitable markets. Not all are in the consumer news business, but there is no reason that couldn’t change and thus provide them with incremental revenue. I imagine that in a new world of news, these organizations would be sought after by “newspapers” to provide, via rewrite and summarization, “tip-of-the-iceberg” consumer coverage of the subjects that they already cover as deep-news.

        bob wyman

    • Distinguishing Reuters as being in the news vs newspaper business is an awesome observation Bob! That makes it an apples to oranges comparison to hold NYT et al up against them in comparison. This would seem to confirm that the anchor dragging the newspapers down to the bottom is indeed the paper.


      • jtrigsby wrote: “the anchor dragging down the newspapers .. is indeed the paper”.

        No. It isn’t “paper” per se that is the problem. Rather, the problem lies in business models that rely exclusively or primarily on revenues derived from the sale of news on paper. The successful *news* organizations listed above all do some paper publishing. The thing that distinguishes them from newspapers is their willingness to tailor the distribution media of their news products according to the needs and revenue potential of each of the many markets they serve. Sometimes, paper is still an appropriate medium — but often, and increasingly, it is not. But paper isn’t inherently evil or wrong… The issue comes in how you use it.

        bob wyman

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  • Ok, so lets see if I can get my arms around this. The lifecycle of news then appears to be:

    Breaking News
    Deep News (?) / analysis / commentary

    Does that work for everyone?


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  • “in my estimation” — the slightest acknowledgment that the pay wall just may work.

    whatever we all think of murdoch’s microsoft move, no one knows for sure what the effect will be and, for now at least, the most confident among us aren’t. my estimation: lovin’ the show.

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  • Since the distribution of news can’t get much faster, the value moves upstream, to discovery and reporting (writing). Whoever can discover new information before other people (has better sources and process) and can process the information into news faster (little to no formal editorial process) should win.

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  • Andy Freeman asks about the long tail —

    Yes, he is right that breaking news/milliseconds count is the opposite of the long tail. That is not the content I was referring to.

    Here is the problem news organizations face…

    Serving a niche audience with high value content can be extremely profitable but its value degrades rapidly as the content leaves that niche and is delivered to a general audience in a commoditized form.

    Jarvis’ example of Reuters concerned timeliness: the niche audience was in high finance; the added value of the information derived from its status as breaking news.

    Bob Wyman’s examples from Science, Law and Governance concerned expertise: the niche audiences were in the various professions; the added value of the information was what he calls deep news.

    The “long tail” question that I was ruminating on was the problem for either news organization — Thomson Reuters or professional publishers. How do they approach the consumer news part of their operation, repurposing their niche journalism for a general audience? The audience for each individual piece of content is small but their online archives are vast and searchable — and so in aggregate, but only in aggregate, this long tail is potentially profitable in an ad-supported, non-subscription model.

    I agree with Wyman that deep news organizations are liable to have more success at monetizing their archives than breaking news organizations. His suggestion that MainStreamMedia — my term, not his — should seek out niche professional publishers for rewrites and summaries of deep news for their general audiences seems sound.

    As for Reuters, I argue that their pathetic 2% of revenues derived from ad-supported, consumer news, speaks to the superficiality of their breaking content. The point I was making was that breaking news organizations are lazy, generally speaking, about repurposing content for their long tail, not realizing that information that had been most valuable by virtue of its timeliness tends to have least residual value, in inverse proportion.

    Thus the type of story that Reuters should headline in its ad-supported consumer news phase should be different from the ones that it made most money from in their millisecond phase. As Jarvis likes to say, journalism online has to be organized not by timeliness but by subject matter — not by story but by topic.

  • Dermitt

    Newspapers could go with print on demand. A touch screen kiosks at the newsstands, train stations etc.. Waste less paper and less waste=more profit. It could be green.

    Digital Book Printing: The New Economics Of Print-On-DemandView more documents from toc.

  • omg.. this is really inspiring! been blogging for a year or so but it was only now that i thought i should monetize my blog and be serious with it.. thanks for this post. Keep blogging. Looking forward to reading your next post.

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  • is well organized, thank you for enlightening comments.