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.

Festival of Media 2009, Valencia

I find myself in a hotel in the wonderful City of Valencia surrounded by luvvies and advertising types who tonight will host their industry 'oscars', having played on the town last night and 'networked' late at the Ghecko Bar.

Some people's idea of 'networking' might be murmuring over a beer at such a bar, for some it is bellowing to be heard in a private conversation in an empty room as they like the sound of their own voice but I think the person in the next door room in my hotel went a step further than most. At first I thought they had found the porn channel on the TV and accidentally sat on the volume button but the rather enthusiastic sounds became a little more human as time went on. They were the unmistakable sounds of either someone trying to impress or who has been paid for. I decided on the former as it started up again with gusto at around 3am before the door slammed and someone left. No names, no pack drill.

So The Festival of Media 2009 is no different from any other event, I concluded.

The Good and The Famous

It is a bit of a marketing coup in that the only direct flights from London to Valencia are via Easyjet and even David Puttnam took the same route as Iberia goes via Madrid or Barcelona at £700 a pop while BA doesn't go there at all. Stelios will be pleased in his nice apartment in Monaco where he hides from our taxman but enjoys his knighthood alongside Philip Green - for him every penny counts.

Online marketing is one of the few industries to have thrived in this recession and it was plain to see amongst the throng of people who had spent £1,800 a head to participate that they were doing well. Stress was eased by copious biscuits, ice creams, glasses of Rioja and free massages on the Adconion Stand, who along with Microsoft Advertising, Orange and VivaKi were the principle sponsors of the event which was organised by C Squared.

There were also many 'Thought Leaders' at the event who had clearly paid significant sums for the privilege of 'Thinking' while a tiny smattering of exhibitors had small but natty stands - including a scaletrix set on the Eurosport stand which I assume was a scaled down model of the Grand Prix to be hosted on the streets of this city in August this year. As it happened, there were all sorts of 'Partners' at the event who vied to sponsor tags to press rooms, to VIP lounges to media to news - you name it, and someone sponsored it. Such is the way in the media, so I'm told.

I met a nice guy on the first night, Phil Cooper who is the CEO and founder of Utarget and who had recently sold a majority stake of his company to Fox. He was busy preparing his talk for the next day but he wasn't bellowing loudly in an American accent to make sure everyone heard him in an empty room nor, to my knowledge, was he the person in the next door room. Dare I say it, he seemed quite a regular guy.

Day One - Transitions

The theme of Day One was all about transitions which was to remind us how media was changing in terms of presentation and how we could all spend more money than before on marketing. It's true that internet marketing has brought a sea-change in the possibilities of not just targeting people but analysing the results too. But the industry needs to get rid of this cliquey 'scam' image of people passing one click to the next and amassing enormous clicks and revenues very quickly for few discernible results. For every piece of content you produce, someone, somewhere can earn money by passing it around and promoting click throughs which most would dispute actually occur and certainly have little to do with the advert and product. It seems that automated click throughs are at the heart of the whole set up and there is a great deal of money to be made on this. Just ask Google.

The Power Play of the day came from eBay and Doug McCallum, VP of eBay EMEA, who was kissing goodbye old models and extolling how eBay was changing to get diversified revenue streams. This is a point in question - eBay is one of the chosen platforms for scammers and it is too easy for them to play the game while eBay itself has moved away from its roots of 'stay at home' millionaires, ditched the smaller traders and focused on big-spending corporates who want to buy and sell on its platform. The trouble is, until it shakes free of the scammers then people will not trust it too well, no matter how much the nice words sounded.

So I settled for the talk entitled 'Are you a re multiplier' and found that if I wasn't, the person in the next door room probably was.

Day Two - Recession and Innovation

From 'Can clients understand IP?' to 'Seriously Social Media' it was all about pioneering communication change and online advertising. The recession has been a bad time for traditional advertising but it has been a great success for online stuff - the industry grew this year at a very sharp rate. The JC in JC Decaux was at the event to augment this fact and how their bus stop and billboard ads are no more and how it will all be online soon - but not yet. After all, we still like to see black and white pictures of Posh and Becks peering at us through the tattoos, Armani underwear and labelled perfumes on the streets of Milan. Tradition cannot change overnight but it can certainly increase spend.

There were some good talks on 'Determining media value in a recession' and 'The Future of Targeting' - all very relevant if you are watching the pennies. But the over-riding message was that the only way out of a recession was to spend more on your brand and more on social media and more on everything, in fact. There is a good logic here - there is no point in stopping spend on marketing in a recession but there is also a profound message about getting value for what you pay for. That has yet to be determined in some quarters but that is always the beauty of the media industry.

Numbers count and science has little to do with it, darlings. Just sup the free drinks and lunches and they will do the rest.

The Oscars

Which brings me neatly on to the 'Industry Oscars' tonight which I shall sadly miss. But when we get awards for 'Best use of the digital landscape' and 'Award for branding bravery' I think it's time to beat a path to the airport. However, I should point out that the Dove Pro-Age campaign is short-listed in the latter but then again so is 'India votes: To shave or not'.

I leave you with the advert on the back page of the Delegate Book from Advertising Week who have a show in New York in September - 'Kudos to the Festival of Media 2009 for progressive leadership and vision.' It did not slip my attention that the advert was placed before the event.

Book up early for next year, luvvies. At £1,800, you know it's worth it.