Are the Newspapers Barking Mad?

“It’s obvious links aren’t taxable, they’re only citations. Why do otherwise sane newspapermen want Google and Facebook to pay the papers for links? After all, links bring readers to the papers, exactly as many others have pointed out.”

I considered the newspapers a bunch of dinosaurs, but then in a podcast, Scott Galloway[1] made an interesting comment. To him, Google and Facebook are the only people who can “monetize” newspaper stories.

That actually made some sense.

What Google does

If I google for “news in England”, I get a page with a band of “Top Stories” across the top The other day, it began with a snippet of text from the BBC and a video about Price Phillip.

If I was actively interested in the Price’s death, I could click on it, but I’m far more likely to look at the other snippets, and maybe click “view all” to get a page of articles, each with their introductory sentence and an image.

That’s the same technique they use to construct a panel of ads if I ask for “shoes near Toronto” or the panel of you-tube videos they position a little way down the front page from the top stories, to attract me to their offerings about the subject I asked about.

Google has used the rules about quotes and the mechanism that Sir Tim invented to do academic footnotes to construct a “newspaper”, one with a particular purpose. The idea is to keep me on Google by offering me whatever I want to know about.

Follow the money

That’s what professor Galloway meant when he said that Google was successfully monetizing the newspapers. If you stay on Google, Google gets the ad revenue. If you go to the Times or the BBC, they get the ad revenue.

Newspapers post links to their sites to get you to go there, in hopes of advertising revenue. Google, and Facebook as well, strive to keep you on their site, so that they get the advertising revenue.

OK, now turn it on it’s head

I’m a philosopher, so at this point it gets interesting. At least two questions beg to be asked: how how do companies who have to deal through an untrustworthy middleman ensure fairness, and how do I make money by disintermediating them?

If I were an Australian newspaper, I could think of at least three approaches to dealing with a dangerous and monopolistic middleman:

  • get Rupert Murdoch to lead the negotiation,
  • turn the middleman into a regulated monopoly, or
  • hold the negotiation in a stadium under Klieg lights.

Australia seems to have chosen the first and last.

Dis-intermediation

More interesting might be asking how we get in front of the reader without intermediaries. Google and Facebook position themselves in front of the newspapers, shoe stores and other businesses by taking the snippets they’re allowed to use and making a whole new product out of them.

The brute-force approach is to let them be the middle-man, but make them pay the publishers for it.

A better way is to get them out of your reader’s faces. At least one company sells search and question-answering serviced to web sites so their customers don’t go to Google for information and risk their redirection to a competitor. Others provide competing advertising exchanges to Google’s (My day job is with a Canadian one).

The real question, though, is how to be the place your readers go first.

  • One answer is be famous: be The Atlantic, Harper’s or the Globe and Mail. That’s not easy.
  • Another is “you already are”.

Only about 40% of the time spent on the net is spent on Facebook and Google. Far more than 60% of the advertising revenue, though, goes to Google and FB.

Facebook and Google are relatively “narrow” businesses. Facebook is about keeping up with your friends, with topical subject and with cat videos. Google is about finding things.

Everything else people do on-line is wide open. Amazon has a very good business doing mail-order. Kijijji and Craigslist sell used stuff. Linkedin is about former colleagues, and getting new jobs. So new ideas and new services are a place to start: newspapers should seek them out and make them their first advertisers.

Some things have already been invented that would be good places for the Newspapers to “be”. Instagram would be a good place for newspapers to start, except it was snapped up by Facebook. YouTube would be good too, except it was snapped up by Google. Id the US decides to breaks up those companies, there will be an opportunity there, too.

And finally, newspapers might well construct country- or language-specific “super-sites”. For example, North American newspapers could partner with C|net to re-launch news.com, with a superior-to-Google top news page taking readers straight to the their sponsoring newspapers, and only a little advertising on the site itself, with most of their revenue coming from referral fees.

To prevent this, Facebook has started experimenting with paying newspaper for what they contribute to what FB wants to be their replacement: facebook!

Not mad, but barking.

The papers, in my opinion, need to realize that they’re powerful, they’ve just been outmaneuvered. The walled gardens have faked out the advertisers, but the majority of the use of the net is still on the open net. They need to think outside the box. Or perhaps outside the doghouse.

–dave

[1] https://www.profgalloway.com, but the comment was from one of his “Pivot” podcasts with Kara Swisher.

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