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21st Century Strategy for Newspaper business

I may only be an Inventor with a hand full of media centric inventions at the fringe of the media business, but I am also close to all the major technologies available to the newspaper business and have had some first hand exposure to people at the top of the newspaper business. Hopefully this gives me the credibility to make some pretty strong assertions regarding the future of the Newspaper business. And these are:

  • Rupert Murdoch is right “content should be paid for”.
  • Google needs to be stopped.
  • A media owned and operated search engine is needed.
  • Collaborative ubiquitous micropayment is key. A system that crosses all media, every newspaper and magazine.
  • The newspaper businesses need to stop using web pages and hypertext links (extreme?).

1. Rupert Murdoch is right “Content should be paid for.”

The modern news consumer is being trained by search engines that news is a commodity… that news is paid for by the adverts in its pages and therefore the customer should get the news free. Google’s mantra is that information on the internet wants to be free… and thus it should be.

However a fundamental concept of western law is that people who want to make a living from something they produced, be it a book, a piece of software or a newspaper article be allowed to have a say over how that work is used. This is the basis of copyright law… the right for the producer to control his own work.

The Google position sounds very generous to the Internet layman except that such a position is one sided and self serving. Google wants news provided free so it can be searched by their customers and so that Google can present advertisements alongside the search results. Their strategy also encourages 3rd parties who recycle and editorialize other news sources (ie most blogs) to run Google ads next to their content therefore leveraging even further opportunities to route control of income away from the originator of the news namely professional news gathering operations like newspapers.

So how is Google hypocritical? Because they are happy to abuse other company’s copyright but will stop at nothing to protect their own. The Google search engine algorithm and the customized operating system running Google’s search application are two of the most heavily guarded secrets (or rights not to copy) in modern history. What is good for the goose is good for the gander.

2. Google needs to be stopped.

Not anti-GoogleCutting access off to Google for search results may sound dangerous, but not doing so is certain death. Google is eroding the newspaper business in two ways.

Firstly, it is making news available for free. True most people probably don’t pay 50 cents for a newspaper since they read a copy left on a train seat or in a coffee bar. But a lot of people DO pay. This, believe it or not, does offset some production costs and also it is valuable in a psychological way to establish that NEWS IS VALUABLE. There is something intrinsically important about making a decision to reach into your pocket or purse for 50 cents.

OK, it makes Mr Murdoch rich, but you have got to be kidding yourself if you think that is all it does. There are thousands of professionals delivering this news to you and 50 cents is a small way of saying “thanks for the effort”.

Secondly, Google is also relentlessly eroding away newspapers other main lifeblood… advertising. By claiming all the advertising space the user sees from the time they do a search, to when they see the news on someone's blog, to when they eventually see the original article in a newspapers web site, only a small fraction of the advertising has contributed to the production of the news you were originally searching for. The rest of it has gone to the company that copied the news and allowed people to search for it.

It’s like saying the neighbourhood delivery boy should get most of the advertising proceeds from the newspaper because he’s the guy who delivered it.  Sorry, that’s just not right.

3. A media owned and controlled search engine is needed.

So how do you stop Google? Well, you can’t stop people searching. That would kill the majority of the advantage that being on the Internet gives to both newspaper businesses and readers. The only alternative?

For media to setup its own search engine.

“That’s not our business” some might say. “It’s too complex” others may say. Yet others may be tempted to partner with one or the other of the search engine companies and profit share to get control over search.

Nonsense. Google itself sells enterprise search servers. Identical search code, identical results and best of all no ads leaving plenty of room for publishers to set up their own advertising systems.

These search “appliances” as they are called can handle incredible loads so there is no problem there. Secondly and most importantly Google is being dared to play anti-trust Russian roulette if they try to play games with newspaper companies that buy their servers as legitimate customers. 

So unless I have wildly underestimated the capacity of the Google hardware, it’s a good bet that this is a very real solution to the media companies dilemma.

4. Collaborative Micropayment is key.

 Another key strategy is gently educating users back into paying for content. It has to be convenient and easy. It also has to be cheap and great value.

Pay per view is old news. And unfortunately getting financial types to  successfully pay for a subscription to the Wall Street Journal does not constitute a likelihood that an everyday Joe will do so. Financial types already pay for stock data and myriad other data services by subscription. They have been broken into the idea.

So how do you get everyday people to start subscribing again? Well, you make it cheap. If an average reader pays 50 cents for a newspaper and views 20 pages of a 70 page newspaper, that is 50 cents times divided by 20 which is 2.5 cents per page. But internet consumption is a lot higher and also a newspaper reader may skim all 70 pages to find the 20 they want to read, so the real cost is 70 pages at the skim cost of 0.7 cents per page.

Yet another problem is that no one wants to go thru the credit card payment guff for a 50 cent newspaper. And only a small percentage want to be roped in to a subscription committing readership for the next 6 months or a year?

Solution? How about this. A News Corp wide micropayment system. Every site published by News Corp anywhere in the world thru one multi-currency micropayment system. Whether you are looking at  The Australian, New York Post or the Sunday Times in  the UK, each page view gets recorded against your device/ subscription. Each publication advertises it’s own page rate.

For example The Australian could charge AUD 0.5 cents per view and the NYPost USD 0.3 cents per view. To make it fair abstracts could be used to display content prior to delivering the full paid content to allow browsing.

Another thing that could be done to make it all palatable is to offer readers a free AUD$20 or similar account kick start. This would allow people to see how it works and make a value calculation before committing to an ongoing pay as you use subscription.

If I were Mr Murdoch, I would also include a bulk rate that discounts the per page rate by a percentage as the user consumes web page views at a rate higher than the average user.

For example.  An average user reads the newspaper 5 days a week, that is $2.50 per week  ($10 per month or so). If another user doubles this consumption in terms of pages, a 50% discount may be instituted so that heavy and loyal readers are rewarded and encouraged.

Even better, what if News Corp, Fairfax, Hearst and all the rest use the same micropayment system. Pricing fairness would be encouraged and the value proposition would be excellent.

Maybe there is room for a cooperative search and micropayment company serving all the big media companies in the same way that Visa serves the worlds big banks and has most of them as shareholders.

5. The newspaper businesses need to stop using web pages and hypertext links.

This is probably the most controversial thing this article will state but I think strongly that hyperlinks need to be limited in the viewing of news articles.

Newspaper advertising and online departments will say I’m crazy, but strangely I think the publishers and editors will side with me.

Hyperlinks make the news experience a hop-here-and-there exercise. Proactive news searching allows readers to follow a story from publication to publication all over the web. But is this what an everyday news reader wants?

No.

Reading a newspaper supplies an edited, tuned contextual experience to reading news. A news item is given a relative heading size and position relative to other big news of the day (ie page 3 articles are less important than page 1 etc).

Answer this honestly, when was the last time you researched something on the web only to find out later that the page that helped you form an opinion was written years ago.

Information frequently has a use-by date. The advantage of a newspaper is its ability to not only give importance context (based on a trusted editors ability to prioritize news) but also date context (based on the time and events that surround the article being read).

This thinking along with the rigid constraints of web page design is a big part of why I designed zkimmer. A physical newspaper can deliver at a glance (by the use of various headline sizes and pull-outs) and tell me the relative importance of news items as I browse or skim (why I called the technology zkimmer) a photographically identical version of the newspaper.

Everything is there. The headlines, the ads, the pull outs, the nice  narrow column widths and the highly legible text.

In the early days of zkimmer we looked at including hyperlinks. Everyone at the newspaper companies we spoke to said it was a deal breaker NOT to have them, EXCEPT THE PUBLISHERS and EDITORS.

They realized a visitor to a zkimmer publication, does the same thing as a real newspaper reader… they stay, they read, they browse… they don’t want to hyperlink everywhere. And funny enough, if the advertisers think about it, they don’t want people hyper linking out of the newspaper either. Yes, they want customers buying but they also want time and exposure for their product or brand.

Maybe it’s time online publishers rethink how they view the web.

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