Sunday, 6 December 2009

The End of Journalism?

Rupert Murdoch recently won a victory as Google has now reduced the number of articles that can be read by its aggregation service of the news, just as one newspaper group in the UK started to charge for reading its online content.

Is this really a victory for Murdoch and newspapers or is it merely a stay of execution?

Newspapers argue that there is a large cost involved in producing their content and so it needs to be recognised particularly as circulation numbers of their hard copies drop as online news becomes more accessible. Indeed, content drives much of the huge 'portal' business on the web that Google is so good at - Google being the almost unchallenged kings of pulling it altogether and then selling zillions of contextual adverts near it and accruing enormous revenue off the back of content. Authors of books have the same issue - Google is a massive threat to the origination of content.

But Google and others would argue that news is becoming ubiquitous on the web. The rise of blogging and phenomena like Twitter means that news is being transported at source by millions for free. Indeed when you sift much of what is printed on trashy newspapers most of it comes from the internet in the first place - newspapers are just the old form of news aggregation.

It's true that newspapers have had a great run for their money. It's a format that has produced vast profits for the proprietors over the years and Murdoch is testament to how rich you can be off the back of content aggregation. Google, arguably, is just moving the concept of news and content into the new millennium.

The argument that the production of news is expensive is moot. Robert E. Heath explains, “I’m not suggesting that news gathering is inexpensive. Or that bloggers will replace reporters. But many in the industry seem to be tripping over the fallacy that if something is expensive to produce, there must be a profit-making market for that product. If that were true, there would be a vibrant market for diamond-encrusted buggy whips.”

In business we all learn fast that if the production of your goods is expensive then you likely have a very limited market to buy it. Delivering news to the masses is now the key part of the business, and Murdoch has not really changed the model of his content production for years - so maybe he is in the wrong here.

Certainly, as a blogger, and knowing that my content is not widely delivered anywhere, I just need to be happy that I have some people who read what I write. I know that if I attempted to charge for it, no one would read it and so it would be pointless writing it. Similarly, if I tried to 'monetise' my site by displaying adverts, as I did when I started following Google's advice, I got far less readers.

In a microcosm, here is the dilemma for the news industry. Change is very much needed - the value of the content needs to be reviewed and the rise of the distribution service is where the real money is. Murdoch, if he were starting again today, would never invest in such an antiquated business model. He needs to recognise that, as do all media types.

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