For the Week of February 6, 2006
This article doesn't have a business model.
In fact, the traditional business model for journalism is circling the drain.
This has real world impacts.
When Al Gore attacked President Bush recently, it didn't get a lot of coverage inside the hall. Most of the coverage was reactive, and thus carried the White House spin. The story went straight into the blogosphere, and the charges were never seriously probed.
That wasn't because of some conspiracy against Al Gore. It was because all major news organizations have cut back their staffs.
Or take the case of The New York Times. The Times' once-famous columnists have practically disappeared from the national discourse, because they have been pulled behind a paid firewall. Readers can't even e-mail them anymore.
The Times' illustrates the problem. There are two traditional models for journalism:
- You rent space alongside the story as a billboard. This is called advertising.
- You charge people to read the story. This is called a subscription.
Neither works for hard news anymore. Not in print anyway (and the Web is mostly print). News of a story is copied everywhere, all at once, so the eyeballs leak out. And given that everyone knows about a news story once it's out, there's no one to charge. There is so much free competition in the blogosphere that what Paul Krugman says doesn't matter enough to be worth paying for.
Fox News' innovation wasn't to politicize the news. It was to do practically everything in a studio. In this it was merely copying most local "news" radio, which had long since replaced news with talk. The political line aligned with the audience's prejudices, and now broadcast news is as dead as print, in business model terms.
I finally began to see the solution when I began covering Open Source a year ago. Software, like news, has become a free good. You can't charge for it, because it's all over the Internet.
The solution is services.
How do you define service in terms of news? The quick way is to gather up the news like sausage and sell it like salami. That's what Newsedge, now part of Canada's Thomson group, does. They aggregate news sources, then sell pre-set slices of it, for a fee. That was Corante's original business model.
But there's another way to go, and that is by remembering what publishers do in the first place. They aggregate and advocate a community or lifestyle. They bring a targeted group of people in touch with products and services that will appeal to them.
The problem is that, when you get beyond the process of selling ads, most media companies can't function. They think they have to either toss their credibility or invade their readers' privacy.
Some magazine publishers long-ago learned how to use their mailing lists as profit centers, not just by renting the lists but by collecting opt-in data on readers, by holding events for them, and by performing research off their data on behalf of advertisers.
All these are valid services that can be performed by Web sites, as are paid tiers, assuming you can bring something of value to that tier that doesn't detract from your central mission. (This is where the Times' paid tier falls down.)
But the real trick, for Web media, must be to become marketing partners with businesses which appeal to your audience, and to get those businesses' Unique Selling Propositions (USP) online. In many cases this will mean a deep, consultative relationship because most businesses don't have a Clue how to replicate their offline advantages in the online world.
It's not always a Web site. It's not always a mailing list. It's not always an organized chat with some defined celebrity the advertiser can sponsor. It's not always a reservation system, or access to a product database. It could be any of these things, a combination of these things, or something else entirely.
Who can afford the time to do this? The same people who now create content. It's not just the businesses that must cross the Chinese wall between editorial and marketing. It's the people. Someone who knows what readers-prospects want, but who needs an income in order to pursue that passion, can be brought together by the site with businesses who have a need to reach passionate prospects. This consultation should result in a strategy that will bring the USP of the client into the online world. The site, in other words, becomes an online marketing agency on behalf of the businesses who appeal to its audiences.
Turning writers into consultants does not mean turning them into marketers. The vision that is jointly crafted by the writer and the business must still be implemented. So the marketing department must merge with the site's tech side, another wall broken. But the result is a service, or set of services, that generate increased business, and what are essentially commissions the store will gladly pay. The value created by each online page jumps, and you can now pay your people, at a profit. It's this value, which I'll call n, that is the key to success. Raising the value of n is the game.
Business models in the real world aren't imposed from the top-down. Only the manipulation of existing models can be done from the top-down. This is a bottoms-up business model, a grassroots business model.
The future of news, in other words, is local. And niche.
I've got a new job. I'm now editor of Atlanta voic.us, a Web start-up aimed at building a community Web platform with a real business model. I'm also all alone in writing the Open Source Blog for ZDNet. (When this started there were three of us.)
My last non-fiction book, "The Blankenhorn Effect" won the Computer/Internet category in the 2003 Independent Publisher (IPPY) awards. Write me for a PDF copy of my latest novel, "Baptists are for Dunking."
On my Mooreslore blog I've written a new novel, "The Chinese Century." It's a story told in real-time, with real characters, but entirely fictional, dealing with the consequences of the falling dollar. I'm beginning a sequal, "American Diaspora," exploring the themes of the first book but with more fictional characters. It's a true alternate history, but set in the present day.
You are encouraged to forward this newsletter widely. And if you have trouble subscribing let me know. Remember: it's journalism that keeps the Clues coming...
Best of the Week
Using the Christian Right as his political base Prince's company, Unspam Inc., has gotten laws passed in Utah and Michigan that could both make him rich and make most e-mail disappear.
It doesn't matter if we drill in ANWR or anywhere else. So long as we're wedded, not just to fossil fuels, but the industrial networks that produce them, we're vulnerable. We're more than vulnerable. We're naked, tied to stakes in the ground, and the ants are coming to get us.
I didn't know conservatism was about supporting only those with the most money, or that government policy should be for sale to the highest bidder.
We've established that bots are bad. We've established that the people who create this poison deserve prison. Now what about those who enable the crime? What about the people who bought spam generated by these botnets, or who bought ads sent by that malware? This was an economic crime, after all. It can't exist without both sides of the transaction.
Something occurred to me when reading of how the Justice Department wants a week of Google search records, ostensibly to enforce the failed law against Internet pornography, but with authority under the Patriot Act. This is getting someone's rocks off.
While our politics may seem, to some, analogous to those of the early years of the Cold War, in terms of technology they're far more like those of the early Progressive Era, the early 1900s. So imagine if the railroads of that time controlled all the roads.
ZDNet Open Source
Clued-in is Jeff Vick. Hi boss.
Clueless are those who claim to be "libertarians." You're right-wing Republicans, get over it.
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