Tag Archive for 'aggregators'

The changing dynamics of news

In the recent controversy that has erupted due to the firing of Michael Arrington from TechCrunch, I believe it represents an era in innovation led by TechCrunch that we’re only starting to appreciate.

To start on this thought experiment, consider how four years ago (meaning, things haven’t changed) I wrote about the two kinds of content that exist: data like breaking news or archived news; and culture which includes analysis like editorials and entertainment such as satire.

UnderstandingI argue that each content form has unique characteristics that needs to be exploited in different ways. Think about that before digesting this blog post, because understanding the product (such as news) impacts the way the market will operate.

Some trends of the past
Over the last two decades, we’ve seen the form (and costs) of news be disrupted dramatically.

It started with hypertext systems that helped humans share knowledge (with the most successful hyperterxt implementation, the world wide web 20 years ago forever changing the world); search engines helping us find information easier (with Google transforming the world 10 years ago), and content management systems helping people reduce the costs of publishing to practically zero (with Moveable Type and especially WordPress driving this).

While the sourcing of news still requires unique relationships that journalists can extract to the world, even that’s changed due to social media that’s created a distributed ‘citizen journalism’ world. Related to this is a movement Julian Assange calls “scientific journalism” where the sourcing of news is now democratised and exposed in its raw form.

Some observations of the present
With that, I’ve noticed two interesting things about the tech news ecosystem, who are are helping shape the trends in news more broadly: tech bloggers kill themselves to break stories, to the point where blogs like TechCrunch have become cults for those that work there; separately, the rise of the news aggregators like TechMeme and HackerNews (or Slashdot and Digg before them) have built the audiences who have been overwhelmed by information overload and crave a filter from a quality editorial voice (the latter being why news personalisation technologies cannot work on their own).

The big secret (that’s not particularly secret due to the abundance of ‘share this’ buttons on webpages) about the news ecosystem is that it’s the aggregators who drive traffic to news outlets that report the news. When you understand that point, a lot of other things become clearer.

Content Aggregation infographic

On the other hand, tech entrepreneurs break their backs for the hope of getting written about on the Tech blogs. The reasons vary from getting credibility so they can recruit talent; exposure so they raise money; and a belief that they can acquire customers (the whole point of building a startup).

Which leads me to think despite all these random observations I’ve listed above, there is a fundamental efficiency evolving in news reporting that may give an insight into the future.

Let’s keep thinking. Other things to consider include:

  • The audience starts with the aggregators for news and the articles whereby the better headlines tend to perform better
  • News in its barest form is making awareness of an event (data); anything additional is analysis (cultural) which is to shape understanding around the event
  • The rise of ‘scientific journalism’ and social media allows society to discover and share information without a third party (due to technology tools).
  • Press releases are an invention to communicate a message so reporters can base their writing on, who often just copy and paste the words.

Some thinking about the future
News should be stripped to its barest form: a description of the event. It should be what we consider currently a “headline”, with preferably a link to the source material. Therefore professional journalists, bloggers, and the rest of the world should be competing to break news not on who can write the best prose but who can share a one line summary based on their ability to extract that information (either by being accidentally at the event or having exclusive relationships with the event maker). The cost of breaking the news should be simply a matter of who can share a link the quickest.

News Article - Wichita Falls Record News

Editorial, which is effectively analysis (or entertainment in some cases) and what blogging has become, should be left to what we now consider as “comments”. Readers get to have the “news” coloured, based on a managed curation of the top commentators.

Tying this together: Imagine a world where anyone could submit “news” and anyone could provide “editorial”? A rolling river of news of submitted headlines and links, and discussions roaring underneath the item reflecting the interpretation of the masses.

You could argue Twitter has become the first true example of that where most content is in full public view but with a restricted output (140 characters); people can share links with their comments; and the top stories tend to get retweeted which further gains exposure. Things could be similarly said about Digg, Reddit and Hacker News. But these services, along with Twitter (and Facebook) are simply an insight into a future that’s already begun. I think they are just early pioneers before the real solution comes, similar to how Tim Berners-Lee created a hypertext system in a saturated market that then became the standard; Google created a search engine in a saturated market that then became the standard; and WordPress created a blogging platform in a saturated market that then become the standard. Lots of people have tried to innovate in the news ecosystem, but I still don’t think the nut’s been cracked.

News has a lot of value, but there is different value based on who breaks it and who interprets it. For example, when I fire up some of my favourite aggregators, I tend to not click on the original headline but on brands I like so as to read their take on the event (though when I’m deeply looking into something, I dig for the source material). But the problem with news now, is there is a fundamental disruption on the cost structures supporting it: the economics favour those who break the news, with those that interpret news suffering as traditionally both these roles were considered the one function. Something’s going on and the answer is cheaper production, faster distribution and more of a decentralised effort across society and not the self-appointed curators.

While the newspaper industry is collapsing, something more fundamental is happening with news and we’re simply in the eye of the storm. Stay tuned.

Why blogs are turning into newspapers and Quora is the future of journalism

MG Siegler wrote a post following our exchange on Twitter. I called him out because for the second time that day, I had logged into Quora only to see minutes later a TechCrunch post being Tweeted that was rehashing the original Quora discussion. Is this the future of journalism?

Blogging 3.0
Siegler wrote an eloquent post expanding on my original jibe that he was practicing blogging 3.0 (I called it that as over the years Marshall Kirkpatrick would constantly joke Twitter is what paid his rent). Now don’t get me wrong: Quora is one of my favourite websites right now, and Siegler (as well as Kirkpatrick) are two of the more talented writers in the blogosphere. But it made me wonder: what’s the role of the journalist in the world, and by implication, the news blogger?

For the bloggers out there who receive bonuses by getting headlines on Techmeme — what’s stopping Gabe Rivera (Techmeme’s founder) from simply importing the RSS feed of Quora posts and having its human editors headline the best answer? As Siegler points out, he (worryingly) already has. Given Quora responses are like blog posts and get aggregated into a community wiki-like answer summary, I can’t see why this won’t become a new input source for Techmeme, completely bypassing the traditional blogs.

And while we are on the topic: Julian Assange of Wikileaks argues that they are pioneering a new form of journalism, which he recently argued in an editorial for The Australian, as “Scientific journalism“. Scientific because you can read the source of the material in its naked form or accompanying an article that discusses the source.

Source material is democratised
Journalists, it is said, are becoming curators of information. Siegler claims he has retrieved information from an obscure source, amplified it, which in turn will be broadcasted by a bigger publisher like CNN. But if Quora democratices the source gathering — it’s so obscure that everyone in Silicon Valley is on it, include billionaires like Steve Chase who founded AOL and Mark Zuckerberg of Facebook — what’s stopping me from “breaking” the apparent news? Or Rivera from doing a direct RSS import of the top answers, direct to his audience of thousands?

If the big blogs are traffic hungry that have them reliant on the aggregators like Techmeme to feed their pageviews….And if this trend to scientific journalism is being promoted, where journalistic bias adds colour to a source only if you want (rather then the bias being the source of your information consumption) — then one has to ponder. That the evolution of journalism will come not from changes in journalistic style, but by changes in technology — an evolution where every single one of us can talk openly about the world and in an applied way.

Siegler says this is business as usual for the bloggers, but I think it’s business as usual for the disruption technology is generating for the news making business. Disruption that will continue to favour those who tease out the source of news (like Quora, Twitter and Wikileaks has) and those who curate it into an efficient way to consume (like aggregators such as Techmeme, Google News and Digg).

The future of journalism resides with those that create the originating value: traffic or content
Before the Internet, newspapers were the sole source of information and so had an elevated role in society. Now they are being relegated to just one of the many sources of news; once considered a horror if they disappeared, they would not impact the world if they went bankrupt today (as there are plenty of online mastheads to replace their value). As social media technologies continue to be refined — where the participants curate the source material themselves — blogs will not disappear like how newspapers won’t disappear. But their position in the world is far from guaranteed, as the audience curation is being done better by the aggregators and the source material is now no longer proprietary to a journalist.

A solution for the newspaper industry

Newspaper executives around the world are scrambling at a solution to the new marketplace. NewsCorp’s CEO in Australia remarked a few months ago that they only make 1/10th of the revenue on websites as they do through print – but with declining print circulation due to the popularity of online news – this is really affecting the bottom line of the industry. Unfortunately, they’ve been attacking news aggregators despite the fact that that’s the solution to their problems – it’s now a changed marketplace that they need to embrace.

The market dynamics are different now
Newspapers existed at a time when information was scarce. They performed the role of aggregating news (as well as creating it), and distributing it to the public through expensive channels which could not be easily recreated.

In today’s age, information is in abundance and is drowning out consumers – with a distribution environment that is now cheap. Further, the role of news aggregation can be done more efficiently through online tools. However this has caused a problem – because in the value chain of online news, the aggregators are the ones that are able to monetise the content. Because people don’t have time to read all the news now, they rely on aggregators that pull content from a variety of sources – and then only click on stories that capture their attention. These aggregators can place sponsored posts or advertisements alongside other articles, and so have found a new way to monetise content in the ‘click economy’.

However from the content providers point of view, they’ve invested time and money in creating unique content, only for it to be ignored by consumers because they no longer have a captive audience – and for aggregators who do, to be monetising content they didn’t pay for.

Google News - aggregator

Newspapers need to drop advertising and think about the entire value chain
Content can no longer rely on advertising as a revenue model – as I’ve argued before, it’s a broken bubble economy. But premium content can exist as a paid subscriber service. This seems to be the direction newspapers are heading. But I think it’s a mistake to enact paid subscriptions on all newspaper websites – it will kill demand and will not scale across the entire industry, other than for the few globally recognised newspapers and strong national brands where their location gives them a comparative advantage (ie, LA times for entertainment; Washington Post for US politics; Wall Street Journal for the capital markets).

Rather than charge consumers to subscribe to a newspaper, what the newspaper companies should be doing is creating a new type of organisation that can pool their resources. They should do this in the same way they did with the associated presses around the world several decades ago, where they can source expensive overseas content in a cooperative, which can then be distributed by newspapers in their niche markets.

Newspapers should create niche aggregators modeled in the same way Google News, Techmeme and its political cousin memeorandum (shown below) have done. Consumers will pay a subscription fee to these aggregators to get access to certain sources of information. And newspapers will get proportionally remunerated through the co-operatative making money on the aggregators service, but also control the distribution of their premium content which can be monetised further down the value chain (ie, once a consumer visits their website).

memeorandum

The model scales because a consumer has only one organisation to deal with, and can control their content consumption and payments. The aggregators also allow the consumer to define what sources of information they value. Better still, this controlled environment of information distribution puts more onus on the content creators to generate quality product. If people include them in their aggregator subscription but never click on that particular organisations content, no one can be faulted but the content creator themselves for not creating compelling content.

Better still, market dynamics can come into play. Part of the function of an aggregator is to cluster stories. This allows for a fair way of distributing the content – the news source that pays a premium can get a higher weighting in this clustering. So an aggregator may have 50 sources that all get clustered as one headline; based on a sources ability to pay per headline, will determine how much the dominate in weighting. This then puts the onus on the newspaper to create a better sales force that can monetise content later down the value chain, which can subsidise this discovery phase of the value chain.

Is this the answer?
Who really knows but its a step in the right direction. With consumers paying to subscribe to an aggregator, they’re getting better value through diversity of inputs – and newspaper companies will get remunerated on how much content they provided as a proportion of the total attention by a consumer on the aggregator. The future of content will be driven by the subscription model, and this is a way that achieves that with the best value for a consumer.

Newspapers are reliant on the aggregators as a source of traffic and discovery. Rather than trying to kill them – they should copy them, license the technology and control the discovery phase of news consumption now crucial for today’s information-overloaded consumer.

What’s holding back newspapers from going down this path? They are too used to being the aggregators themselves. Instead, they need to realise that they must specialise now. They should focus on creating great content (a discussion in itself), and let technologists drive the discovery phase.

Can the newspaper industry please stop their damn whining

Google is not a blood sucking vampire. In fact, the newspaper industry is a spoilt little brat.

Search engines such as Google and aggregators (like the constantly criticised techmeme) provide a huge amount of economic value for the newspaper industry. They enable discovery by people that are not regular subscribers to their content. They provide traffic, which drive up the page views, that enable them to sell inflated prices for perceived access to an audience.

Newspapers put their content on the web for free by their own choice. They have plenty of ways of excluding their content from being freely accessible, either through a paid wall or technology conventions like the robots.txt…But they don’t want to completely do that, because they lose the traffic.

Subscription models will be the future revenue model for content. One where people will pay for constant access to a particular information provider (as fresh access – not static objects – is where the real value comes from in information and especially in news). Of course, this means people with established brands can only do this as people will not pay unless they know what to expect. However despite their current lead in this game due to their century-old mastheads, the newspaper industry is refusing to solely go down this route. And the reason for this, is because they still rely on advertising for the majority of their revenue mix – and advertising is driven by traffic.

Newspaper executives want the economic value provided by search engines and aggregators in discovery and traffic – but they whine consistently because these innovative new businesses in the information age have found a way to monetise this function in the value chain.

The solution is simple: cut public access, and put all content behind a paid wall. And only participate in exclusive aggregators. The search engines and free aggregators no longer have your content to add to their mix – and yes, you Mr newspaper executive no longer get as much traffic. But that’s what you get for being a whining little kid.

I am sick and tired of hearing industrial age executives refuse to compromise with information age business models.