PaidContent.org has posted an important analysis by media consultant Arnon Mishkin showing that aggregator sites derive far more value by compiling headlines, ledes and links than do the news organizations that actually produce the journalism.
This isn’t exactly counterintuitive, but it does run counter to what a lot of us had hoped was true. Jeff Jarvis, more than anyone, has popularized the idea of the “link economy.” Trouble is, it may not exist. At the very least, it’s likely a lot more complicated than simply a matter of posting links and assuming the linkee will benefit at least as much as the linker.
Here is Mishkin’s key insight:
Actually, it shouldn’t be surprising to anyone who’s thought about how people have historically read a newspaper: They’ve scanned the headlines and then turned to the sports, movie listings or recipe pages, depending on their real interest. As the saying goes, “People don’t check the news to read about the fire, they check it to learn that there wasn’t a fire.”
Historically, the value of those casual browsers was captured by the newspaper because the readers would have to buy a copy. Now all the value gets captured by the aggregator that scrapes the copy and creates a front page that a set of readers choose to scan. And because creating content costs much more scraping it, there is little rational economic reason to create content.
Mishkin’s post comes at a time when news organizations from the Associated Press to News Corp. to the Boston Globe are dipping their toes in the water with respect to charging for their content. That’s fraught with difficulties, too, although I’m slightly more bullish about the idea of per-click micropayments than I was even a few months ago.
In the long run, we’re going to have to differentiate between good and bad linking. Blogging is the classic example of good linking, since the blogger adds value through analysis and reinterpretation.
But aggregating in a way that removes nearly all incentives to click through to the original news site defines bad linking. The Huffington Post is one example. Newser is an even more egregious example: when you first access the site, you get photos with headlines; click on one and you get a Newser-supplied summary (with more ads); and, finally, with a second click, you jump to the original. Link economy? More like piracy.
No one really knows what the answer is. Mishkin offers some unsatisfying ideas at the end of his post. My own sense is that newspapers need to try a variety of strategies:
- Charging as much as the market will bear for the print edition.
- Developing paid online editions for e-readers, cell phones and laptops (i.e., Times Reader and GlobeReader).
- Removing the “today’s paper” feature from their free Web sites. (I would continue to offer all or most of the content for free, but not in the form of an exact substitute.)
The search for a business model continues. Mishkin has punched one more hole in a fantasy a lot of people, including me, had believed in for as long as we could.
(Via Howard Owens’ Twitter feed. Owens, you may recall, was a top official at GateHouse Media during that company’s legal battle with the New York Times Co. over the Boston Globe’s aggregation practices.)
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Susannah Vila
Where does Outside.in fall?
O'Reilly
Part of the genius of the iTunes model is the distribution of individual songs. I wonder if a clearinghouse of individual articles, daily or weekly subscriptions could be developed so that e-articles could be purchased for a fee less than the monthly subscription and from a central billing mechanism, such as "iNews".
Whalehead King
I know I'm old fashioned but part of the appeal of the hard copy of the newspaper is stumbling across something I wouldn't read otherwise. A news feed selecting articles tailored to what I've read before or topics I've subscribed to doesn't provide that.I don't know what the market will bear for door-to-door subscriptions, but I'm happy to visit a convenience store or coffee shop to buy a paper. At the moment, I'm not happy paying a dollar for the Boston Globe. I could go for an extra 50 cents but beyond that…I already don't feel I'm getting my money's worth. Charity only goes so far. They should be thinking of themselves as a daily eddition of a magazine along the lines of The Econcomist or the New yorker, two weeklies that provide in depth analysis as well as some fluff besides, instead of serious-seeming fluff and less-so.Thanks for this intuitive/counterintuitive observation.
mike_b1
O'Reilly, the difference is that mp3's have a shelf life. News, by its nature, does not.
lkcape
The iTunes phenomenon has much to do with Apple's restrictive policies regarding their hardware architecture and access to their products….For paid news internet news content, the restrictive, almost monopolistic control is missing.It will likely only take one or two major news outlets to refuse to join the stampede for paid contact to fall apart. (See airlines and fare increases.)As the eyeballs shift from the paid content providers to the free content providers, the advertising dollars will shift, too.I suspect the road will still be very rocky for those that try the paid model.(BTW, Apple's rejection of the GoogleVoice App for the IPhone may get scrutiny that Apple may not appreciate.)
mike_b1
lkcape, your comments suggest that scarcity/exclusivity is driving demand, as if iTunes is the only place users can go for digital music. That's a gross misunderstanding of the drivers behind the popularity of digital music. It's the file format and its ease of delivery and mobility, and not the iPod itself, that's so attractive. For those reasons, digital music would still dominate the scene, even if there was no iPod, much like people would use cellphones even if there was no iPhone. There are dozens of other MP3 players available, and no user is locked in to Apple's relatively exorbitant pricing.
Amused
I am a dinosaur who thinks there is no better way of distributing news than a newspaper and no better way of being informed than to read several of them.Pay per click for news stories is an inevitable disaster. The only people who talk seriously about it are news junkies or people who make their living in media. It's not going to fly in the real world, except among people who are well-informed as it is.Am I going to pay to click on something just to skim it, or to see what it's about? Doubtful.Better to force-feed the ads.Hulu and other video sites do it, newspaper sites tend to let the viewer click out of it fairly easily, for fear of losing the view. Does the technology exist to determine whether a click on a story comes from someone on your site or from afar? Can it force-feed an advertisement to new arrivals, or arrivals through aggregators, that the viewer must endure for a long enough period to get a message across, rather than click it away as soon as it arrives? Making someone sit for a spot on every story they look at after landing at a site would be death, but ads you can't click away from for new arrivals and maybe on certain specified movement while on site just might make the advertising worthwhile.For all the talk of the outdated business model of newspapers, the Web model often ssumes that advertising is something people accept voluntarily. They don't. They need to be captured.
Jim
This argument assumes that consumers would seek out news content from the primary source on their own if the aggregation sites weren’t there to steal all the juicy headlines. In actual fact, I think many readers who get their news through a site like UHub wouldn’t choose to visit Boston.com at all without a clever person like Adamg pointing them in the right direction.Anecdotally, I have many 20-25 year old friends who have never purchased a copy of the Globe, and they only wind up on Boston.com when they’re directed to it by aggregation sites that they trust.Aggregation is obviously turning some percentage of readers into sedate headline browsers who don’t chose to click through, but perhaps the net loss would be even greater for content creators without aggregators to engage new audiences and highlight good work.
Dan Kennedy
Jim: I agree, but I would also argue that Adam Gaffin provides the sort of smart, value-added blogging that drives traffic to the sites to which he links, including Boston.com. Universal Hub is the opposite of an indiscriminate aggregation site.
Jim
Yah, I had a feeling UHub would be a bad example for that reason. Shift the argument to something completely indiscriminate though, like Google News. Assuming only 5% of visitors actually click through, isn't that still a huge number of new visitors who wouldn't otherwise visit the content creators?The article proves that aggregators aren't enticing a large percentage of people to continue to the content creator, but that isn't enough to debunk the idea that the Link Economy is benefiting news organizations overall.
Dan Kennedy
Jim: I considered saying something about Google News, but it was too complicated for that post. A very interesting case. Consider two facts:1. No ads on the Google News home page. So even if Google is diverting eyeballs from the originating sites, it's not profiting from those eyeballs. We should all keep that in mind the next time we hear a dinosaur bellowing about all the money Google is making from stealing content.2. Google News does run ads on search-result pages. But as Howard Owens has pointed out (don't have the link handy, but want to give him credit), when you get down to that level you are definitely benefiting the content creators. The reason: you're dealing with someone who is actively looking for something, and who will click through.
aml
I wonder how much of this has to do aggregators, and how much of this has to do with things like the way content is presented differently on the web and the way people consume it? According to Boston.com's mediakit http://www.boston.com/mediakit/bgm/sections.htm their homepage gets more traffic than their whole news section (and slightly less than their whole sports section.) Is the boston.com homepage stealing pageviews from their article pages? Does their RSS feed steal traffic from their site? From the presentation side, news sites generally all fit the "homepage with headlines and teases that link to article pages" layout. (once sites get to a certain size, along with the homepage there are several "section fronts" of related content, but homepage or section front both lead to article pages.) This sets the reader up to make snap yes/no decisions of what to read based on a headline and maybe a lede, but can get an overvview just on one pageview. The newspaper layout of sections, stories and jumps gives the reader fewer choices one each page and more of the story to get involved with for each one (and more of a chance to see ads while skimming)From they reader behavior point of view, the way a reader has to click to choose a story, and the way a click has such a jarring affect in the browser (a new page view) it makes choosing to read a story a much more active action than choosing to read a story in a newspaper. Also, the news site being read is just one of a million places the reader can be, and can be discarded much more easily for the next site to visit. (skim, click, read, back, click, and then on to the next site.) On the other hand, clicking to select content leads to environment that encourages the reader to move next, next, next. A newspaper once unfolded is the destination for the reader. You can read it fast or read it slow, but you're committed to this destination. (Is this the point the GlobeReader? To make it more of a destination?) I guess my question is: Aggregators or not, does the web medium encourage reading in a way conducive to advertising?
Aaron Read
I doubt newspapers will innovate and find a new profit model. Instead, they'll probably try to sue their way out of this. It's working for the music industry, ain't it? (that's sarcasm, son)In fact, PaidContent's central thesis could, in theory, be the cornerstone of a copyright infringement argument…essentially the analysis demonstrates that a form of theft is occurring.Unfortunately, that kind of theft just happens to be what the entire concept of the internet is based on. So there's no way to legal your way out of it when the law is so clearly not equipped to deal with the reality. But it's a lot cheaper to throw lawyers at the problem than to actually try and find a solution.Of course, IANAL, so for all I know this issue has already been settled in court…but I doubt it. IP law is such a mess I don't think anything is truly "settled" in that arena.
aml
Aaron, the aggregator argument is the same one brought up by David and Daniel Marburger to add new (or they claim restore) restrictions to copyright law.http://www.cleveland.com/schultz/index.ssf/2009/06/tighter_copyright_law_could_sa.html
Dan Kennedy
Ami and Aaron: As GateHouse Media's lawsuit against the New York Times Co. showed, the Marburgers are really pushing it by claiming abusive aggregation isn't already covered by copyright law. It is.The issue isn't linking. It never was. The issue is copying.