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Google announced plans late last week to link news directly from the Associated Press and three other news agencies rather than individual newspapers, a decision that will reduce the number of visitors to Web sites run by those newspapers.
Why didn’t AP member newspapers discourage the organization from a move that could reduce their advertising revenue?
“They’re run by idiots,” said John C. Dvorak of PC Magazine. “The newspapers obviously encouraged the AP and others to do this, or they would have squawked when the idea came up.”
Google isn’t big enough. Right. So, now the dingbats who run some of the big news services are making it bigger. How? Well, they reckon it’s okay to make Google “take” their feeds rather than link to their very own customers, thus screwing those customers and further benefiting Google.
Let me try to explain.
The Google News site robotically scans hundreds of news sources and provides a faux front page of popular news items, with hundreds, if not thousands, of redundant links to those stories (as they are carried by local news outlets). Google links to these outlets, and this is where the reader then goes to read the story. If the story is from the Associated Press , then the local outlet pays the AP for the content.
[Continue reading Google Gains More Power]
This is undoubtedly bad news for newspapers, at least in the short run. Silicon Valley CEO and former journalist Alan Mutter observes that “most news organizations have been cutting back on original content to shore up their eroding profit margins.” Those newspapers are going to lose click revenue as a result of the move.
On the other hand, Mutter argues, the entire banner advertising business model that newspapers have been using is becoming “bankrupt.”
The solution for publishers is to get beyond selling passive advertising by the bellybutton in an ancient, brute-force numbers game they can no longer hope to win. Instead, publishers need to start developing individualized, transaction-oriented products that will deliver targeted, qualified leads to advertisers who will pay handsomely to reach live prospects poised to make a purchase.
[Continue reading Reflections on Banner Ads]
This has been a long time coming.
It should have been obvious from the moment pre-Web online newspapers became a topic of discussion that local dailies would lose their place as a source of national and international news. Why get an AP story from your local paper when you can access multiple versions directly from Reuters, the Associated Press and other primary sources before your newspaper even gets off the printing press? As Jack Shafer of Slate magazine says, the front page of the local daily already tastes like “chewed gum.”
My feeling was that one of the mega-dailies or the AP itself would assume the mantle of national and international news publisher. It now appears that Google wants the job and is more capable of handling it than any news organization.
If newspapers want to compete in the new media world, they must provide original content. In the long term, that’s great news for journalists. But newspaper publishers are going to have to wake up first.
In era when ad revenue continues to decline at an alarming rate, the newsroom is the worst place to try cutting costs. If they are going to flourish, local newspapers have to place their emphasis on local news. To do that, and do it well, they need to increase the size and quality of their staff.
The day will come when virtually no one turns to the local paper for national or international news… possibly not even for state news. But where else will they turn for local news?
The Associated Press will no doubt be facing a new reality as well. Instead of 1,700 or so U.S. newspapers buying its national/international content there will be only a few centralized online news publishers, such as Google or Yahoo. Local papers will generate local news. And instead of buying news from the AP, they will instead sell news to the organization or perhaps directly to Google, Yahoo and the others.
It’s the dawn of the “freelance newspaper.”
These are certainly interesting times for the newspaper industry. But the news and entertainment found today in your local newspaper aren’t going away. All that’s changing is the delivery system and the amount of detail that can be brought to bear thanks to new technologies.
One big hurdle remains before this change can be fully embraced. How will these emerging news and delivery systems be funded?
- Advertising (delivering an audience to advertisers)
- Enhanced advertising (actively helping advertisers)
- Government subsidies
- Non-profit funding
- Some other business model
Today’s students may well be providing tomorrow’s answers.