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Tuesday, April 28, 2009

The future of newspapers and content providers

I've been investigating some of the noise newspapers and online/offline content providers have increasingly been making recently. Some have described it as the perfect storm; all due to the credit crunch, the resultant decline in overall advertiser spend and the worldwide migration to online/digital being the predominant medium for media consumption (a world where revenue models truly create a clash of civilizations)...

Few people have brought this into the equation; end user generated content/news - i.e. CNN's iReport - citizen journalism enabled upon a fabric of connectivity and content capturing devices that easily upload data into the cloud (e.g. mobile phones capable of taking more than 5 megapixel pics and recording high res video - suddenly everyone is a journalist and everyone can contribute content irrespective of location)... Then there's examples like YouTube and Twitter and and and... more on this subject later ;-)

The decline of newspapers have gone from a few little blogs and speculation about a year ago and now has grown into a cacophony of worldwide panic...

I don't believe all newspapers will completely die out...just yet...but I do believe those that are built on archaic business models/revenue streams and/or fail to embrace the hyperconnected have an immensely reduced lifespan. Bill James gives a simple but insightful account of the history of newspapers relative to its' current (d)evolution - check it out here.

This is simply newspapers going through the same inertia that the record label companies did in the early 2000's. Remember the Napster lawsuit, continuous shutdowns and then the rise of iTunes which now sells more music than Walmart in the USA?

We're in phase 1 of that right now within the context of our newspaper friends... Evidence of this is the recent bellowing made by the worlds largest creator/compiler/aggregator/distributor of news content, the Associated Press;

"AP and its member newspapers and broadcast associate members are the source of most of the news content being created in the world today. We must be paid fully and fairly. We can no longer stand by and watch others walk off with our work under misguided legal theories. We are mad as hell, and we are not going to take it any more." - remarks made during an AP Annual Meeting by Dean Singleton, Chairman, Associated Press, 6th April 2009

LOL...what are you going to do Mr. Singleton? How are you going to stop every single blogger on the planet? How are you going to apply your intellectual rights and copyright protections in countries that have no regard for your misguided legal theories?

Check out this 17 min interview with the CEO of AP Thomas Curley and Charlie Rose - love the way he refers to online evolution as "devolution" in his first opening remarks;

Interesting but I do think that the AP is taking the wrong angle on all of this - who can blame them? There's so much of their money at stake! Tom Curley, you're sounding like encyclopedia guys when Wikipedia became popular...or like a record label company that now sees Apple iTunes selling more music than any other entity...or much rather like those laywers headbutting Napster and threatening every citizen with subpoenaes used to attain ISP TCP/IP records...

Don't get me wrong...I have a very high regard for the AP and what they have done and will continue to do as stated by them; "The AP news report remains the gold standard of newsgathering and reporting throughout the world. And last year showed that news was more important than ever. From the presidential election to the Israeli offensive in Gaza, and from the White House to your statehouse, last year proved dead wrong those who claim that the power of original journalism has waned. A few years ago, AP started to keep a tally of its journalists killed, harassed, beaten, detained or prevented from doing their jobs. Last year, that number totaled 62. It is not a profession for the fainthearted, or those who work in their pajamas. Beyond the news, as well, AP brings you other unique value propositions and special opportunities. You may not always be able to put a dollar figure on them, but they all add up to value you won't get anywhere else."

Look at how much infrastructure they put into it; click here... Unfortunately the world does not allow them to continue generating revenue in their traditional manner(s) and now it is time for change! I completely disagree with that last phrase "value you won't get anywhere else" - as stated above I do believe that end user generated content poses the single biggest threat to the AP because it simply devalues the need for their sophisticated infrastructure, resources and thus licensed content...

The future here will be a hybrid model of freedom mixed with corporate return on investment with intense innovation (i.e. Amazon's Kindle) - a blend of accredited journalism and the person capable of capturing content right there on the scene i.e. CNN's iReport... AP should embrace this and become the nr 1 place for end user generated news content... Else they'll just land up being like the record label companies versus the Amazon's (DRM free MP3 sales) and Apple's (iTunes)...

Interesting times! I'll end this off with a snippet from Mike who commented on the Charlie Rose video interview; "The problem here is negligence on the part of the leadership of the press. They were caught asleep at the wheel while dramatic, seismic shifts were occurring in the marketplace and they failed to innovate - early or often enough to keep pace. Like the recording and automotive industries, the traditional press too now finds itself caught up in a downward spiral. Trying to backtrack and charge for content now is not the answer. There are many other, more innovative ways to create value which consumers are willing to pay for, but the ones Curly suggests are clearly not it!

Innovation is required here - a skill, that for all their homage to the concept, many of our business leaders are stupendously poor at executing. Capitalism is Darwinian - evolve and adapt or die. And this my friends is potentially and sadly the sound of a dinosaur gasping it's last breath! Compensation in a capitalist system never succeeds through demands or through litigiousness, but instead by creating content consumers want, when they want it and how they want it. Unfortunately the A.P. is still under the delusion that they control the purchase decision. Good night and good luck!"

Nice comment Mike ;-)

P.S. Garett Rogers comments on this also...check it out.

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