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.

Google's Gonna Get You

I am a massive Google fan. I think they have done more to open up the web and unlock the information on it than any other company. It's all very well having browsers and content but finding what you need in the morass is what has made the web exciting, to my mind.

But all this comes at a price - despite the recession, Google clocked up $5.7bn in revenue last quarter and while profits dropped to $382m, they have made as much as $1.29bn of profit in Q3 of 2008. It is, by any measure, an extraordinarily profitable business.

One of its main functions is to aggregate content so that we can all easily digest information, like that from newspapers. While having amazing deals with newspaper firms which nets it enormous advertising revenues, papers are finding it hard. In a recent conference organised by the newspaper industry, Google CEO, Eric Schmidt, was both critical of papers and criticised by them.

On the one hand, news companies saw the incredible revenues Google was making effectively off the back of their content, for which they have to pay handsomely to produce. On the other, Google believes that newspapers should revolutionise and get with the fact that they are useless at distributing their content. Schmidt criticised the newspaper industry for 'pissing off' its consumers and that Google were the heroes for distributing the content more effectively.

The Big Machine

Producing news is an expensive business, much more expensive than aggregating and distributing it. If someone delivered a paper to your doorstep which was just the information you liked as a synopsis of cuttings that would interest you from all papers in just one copy, small enough to digest the headlines but expandable if you want to read the detailed article, then that's what Google does. With it comes all that context sensitive advertising, carefully targeted to get us to click through and earn fortunes for Google.

It is, undoubtedly, a terrific service.

But it is just that. The content is what drives the interest and it's easy to forget that. I write this blog but the wider world beyond a clique of readers never get to see it as Google does not rate it and I do not pay them for anything. The result is that even if I have some practical advice for SMEs, beyond a few dedicated readers, the wider world never knows about it. If I wanted to expand my readership, I would have to pay Google to take interest. That does not stop them hosting the blog or popping adverts on the side. My content still earns them some money.

Google was described by one source from within the newspaper industry as a 'tapeworm', parasitically dependent on the content produced at great expense by the news industry. The consumers, though, want it all ways. I read the Telegraph from time to time because I like to do the crossword but if I want to find out about something quickly I 'Google' the subject and choose a prominent news story - it may not be the best written, the best informed or indeed written by a factual journalist in this country even, but it will be from the company with the highest Google rating which is ultimately driven by money.

The Future

Rupert Murdoch, that bastion of honest content and fighter on behalf of the consumer, has asked if aggregators like Google should in future pay for the content. It's a relevant question from the wily proprietor. There is a long term risk that if news is only ever presented on the web then Google and others will have all the power in terms of distribution whereas in the old days the news companies controlled the chain right down to the vendors in the street. It was easy to see how money could be made from news. Now it's not so clear.

Google always comes back to the 'fair use' argument - if this is what consumers want, why fight it? While newspapers would argue that the intellectual property rights to their content is being constantly eroded by having such ease of availability. The problem really boils down to, if content aggregation becomes the dominant way in which newspapers are distributed and read, then how will newspapers make money on their content? There is a small kickback of advertising revenue to newspapers, but you can rest assured that Google has the lion's share for itself.

Much of what is reported in papers is rehashed and blogged on - some bloggers making some pretty profits on the back of the original content. News opinion like mine, derives its subject matter from content on the web - I make no excuses for that. While I make no money from it, it would be quite an easy thing to do - so for once, I have some sympathy for the man who took away the Ryder Cup and stuck it on Sky.

News has always been big business and while ticker feeds like Twitter claim that it is the new way to spread word faster when terrible events occur, feeds such as Reuters have specialised in this for years. The power is that Twitter could create a new army of 'amateur journalists' across the globe who provide short, sharp news from source rather than rehashing news on line.

Or so we would like to think. It comes as no surprise that Google is rumoured to be targeting Twitter as a takeover. It is a short hop to believe that Google is then going to become not just the content aggregator but also content provider of millions of 'news' feeds.

The News Revolution

The problem for people like me is that in a busy day with other things to do, getting news needs to be in short bursts and I turn to quality sites like the BBC, Sky, Bloomberg and others to get my feeds. I have tried Twitter but it really is like sitting in a large room with thousands of people talking and maybe one person in the room, at just one point in the day says something of real consequence. The rest is just a blur of irritating noise. To get anything from it, you have to use the aggregation devices, many of which are available like Tweetdeck and these can even be fed to your mobile.

You can then 'follow' your Tweeters into the toilet, through the supermarket and down the golf course and see what they are doing, reading and knowing. The problem is that the VAST majority of the 'Tweets' are just nonsense and trivial to the point of pathetic. Like watching Big Brother, unless you are interested in the armpits of yawning contestants lounging on a settee talking garbage, Twitter provides you nonsense.

The world of news still is all about sifting through the mass of data and source bites and putting together something of interest - reporting both facts and content. Reading Michael Parkinson's superb analysis of Jade Goody's life in the Radio Times was brought to me by Google but the content was all Parky. Without his insight, and the thousands of writers who provide news content and make it interesting and informative, Google would be nothing.

We have this dichotomy all the time. My wife's Uncle, Terry Tyler, is a watercress grower and his cress is grown in the clean riverbeds between Sarrat and Chenies in Hertfordshire. He is not a big producer and he cannot afford the fees and chemicals to go 'organic' (perhaps another story of a sham industry awaits) but he uses no fertilisers at all to produce the most peppery and delicious watercress you will ever taste. You will never, ever buy it at any supermarket in the UK or even on market stalls in 'market towns' which advertise fresh, local produce. You will find it used by some of the top restaurants around Britain, however. The reason being is that he cannot afford to sell his product at supermarket prices as he hand grows and picks the lot. Despite knowing this, I still buy most of my watercress in supermarkets as it is more convenient, even though I am know I am buying inferior product and supporting large faceless suppliers who would put Terry Tyler out of business if they could.

We are a consumer society, and we want our product here and now, conveniently and cheaply. I think what will happen to news will be the same as has happened in Terry Tyler's industry - the value of the content will diminish and the value in distribution will grow. We will see a fall in quality but a gain in availability. No longer will stories arrive at us based on the quality of the journalism and the facts but on the who has paid to be at the top of the search.

Don't knock it, we asked for it.