Searching for Revenue in Free Journalism

The state of journalism. It is bigger than the Internet, the fall of classified advertising, funding for investigative journalism, search aggregators and the link economy. To briefly take a broad 30,000 foot view, if not the foundation, journalism is a pillar of a democratic society. It is the check on the check and balance governmental system designed by and for the people to ensure justice as well as truth.

Journalism continues its predicted and precarious state of crisis. There is no one entity to directly blame, but the problem seems clear. Free. The very first thing taught in every economics class is that nothing is free. Everything has a cost. Clearly objects, food and even land has a value, a monetary cost. Cost can be subjective, but one of the few truths of this world is that all things have a cost established through a price derived by demand. The cost to produce a thing must also be factored into price and perhaps this is specifically where journalism stumbled. Providing content for free that holds high demand and cost of production to the nascent communication medium known as the Internet in the ’90s is the jagged root befalling journalism.

Priced to Sell. It is an educated, well researched address by Malcolm Gladwell in the New Yorker about the longevity of the online business model of free that has been propped up by Internet. The article in part reviews the book “Free: The Future of a Radical Price” by James Moroney read Chris Anderson as well as the premise of free as a business strategy at large. It is clear Gladwell questions the blogosphere’s war cry that “Information wants to be free,” but does not go all the way in completely debunking the theory by closing with:

“The only iron law here is the one too obvious to write a book about, which is that the digital age has so transformed the ways in which things are made and sold that there are no iron laws.”

I will take this final step. Information absolutely, positively does not want to be free. Moreover, ideas and information are the most valuable product of man. Unfortunately, the Internet and the link economy has driven down the cost of access to ideas expressed through words and video so far that ideas and information have become free in the minds of most consumers. Sure, in most cases there is a cost to access the Internet, but the idea creators do not receive compensation. Understand that there is a difference in this discussion between ideas and communication. The varied platforms known loosely as social networks that advance societies ability to communicate is a great positive built on the back of the Internet. It has allowed the dispersion of knowledge such as natural disasters and human rights violations to a global audience at a speed never seen before. Free communication is good. Free ideas is not.

The Associated Press announced yet another plan to try and ensure compensation for its content – its ideas that have very real value both to society and in cost to produce. As expected, the blogoshere berated the AP and denounced the organization as decaying old media institution that we would be better off without. Shortsighted in my opinion. More and more media companies are beginning to awake to the strategy that the one thriving newspaper in America has stuck buy throughout the Internet age. The Wall Street Journal is not free and I expect by the close of 2010 most other news organizations online will not be free either. Ideas and information has value. This year free has eliminated news papers such as the Rocky Mountain News. From its ashes rises the RockyMountainIndependent that will include memberships as source of revenue. True, for now, most of its content will be free, however it is developing separate content for paying members that I expect will expand to a larger portion of the site. Ideas and Information are not free. They have value and should be paid accordingly to ensure a sustainable future for journalism.

Time Warner vs LIN – Helping Promote the DTV Transition

Time Warner Cable’s churn rate is about spike in at least 13 cities. Yesterday, Time Warner lost the right to carry LIN broadcast stations because it refused to pay a retransmission fee of what amounts to less than a penny a day per subscriber. In the Austin market this means Time Warner customers no longer have access to NBC and the CW. The cable provider went so far as to develop a Web site full of corporate spin accusing LIN for trying to charge its customers for a free service, while ignoring the fact that all cable providers charge subscribers for stations they could access over the air for free.

Time Warner Cable spokesman Alex Dudley said broadcasters like LIN TV will have to look elsewhere. “They are not gong to prop up their failing business model on our customers’ backs,” Mr. Dudley said. – Wall Street Journal

This notion of a “failing business model” is amusing because it is directly applicable to Time Warner. A decade ago most customers had only one option for cable. The satellite market was nascent and phone companies were still simply phone companies. The problem is Time Warner refuses to acknowledge that it is not the only game in town anymore and in fact has become a commodity. In Austin Dish Networks, Grande Communications and AT&T have all negotiated deals with LIN. Price and selection dictate customers cable provider selection. Currently, Time Warner fails at both.

Since most of the markets impacted are small, it is likely Time Warner thought it could strong arm LIN into a more favorable arrangement. Unfortunately, one of those small markets involves the FOX station in Green Bay. In PR 101 I believe there is an entire paragraph dedicated to not messing with the ability of Packer fans to watch their team. Anybody want to guess what the feature story on most NFL pregame shows will be this weekend?

February 19, 2009 is an important day in the U.S. It is DTV day. As most should know, all analog broadcast transmission will switch to digital. Most cable company retransmission contracts with local broadcast stations expire on Dec. 31, which could point to a boom in digital antennas and converter boxes. For those that are a bit more Tech savy, this could be the final nudge to abandon cable entirely. As I discussed in June, it is now possible to watch nearly all television legally online. According to the Wall Street Journal’s Nick Wingfield, some analyst suggest up to 90 percent of prime time network shows and up to 20 percent of cable programing is now availabe and these numbers will only grow with time. A vision of the digital living room: HD TV with antenae to receive local channels that is connected to a computer with high speed internet access. Thanks to online movie streaming capabilities from companies like Amazon and Netflix, the computer does not even need a DVD drive. Since Time Warner Cable is also experimenting with metered internet service, I do not really see any consumer benefit in subscribing to a single offering. Perhaps Time Warner should rethink spinning off AOL…

Revenue outlook poor – nope just strong headwinds

Per today’s WSJ…apparently the big new jargon word for corporate communications attempting to side step the bleak earnings outlook for 2008 is “headwinds.” A smattering of Executives have recently used the term including Wachovia, GM, Yahoo and even the Fed. The article looks at the true definition of the word, its history of use from an economic perspective and the validity of its current use by corporations.

My issue is this represents the continued practice by PR to mask facts with jargon that provides little useful information. Telling analysts you will be facing a headwind is completely meaningless. As example from the article, when an audience member asked “So, how big a headwind should we think about in ‘08?”…the executive stated “Well, right now, it’s a big headwind.” Thanks…that clears it up perfectly.

Thoughts?

NYT says we’re free…please click Ads

At midnight tonight the TimeSelect subscription service for the New York Times will be no more. Its archives will be free to access from 1987 to the present. The our research team will be delighted to hear that content from 1851 to 1922 will also be free for all to read. The WSJ is reportedly to open up its site soon as well…in time Factiva may need a new business model.

Bloggers want to Strike…readers go elsewhere

Did you ever wonder if you favorite blogger was being fairly compensated?

Confused…I definitely did a double take this morning when TechCrunch provide a post discussing a recent WSJ article about “a coalition of left-wing bloggers trying to form a labor union that they hope will help them receive health insurance, conduct collective bargaining and set professional standards.”

This seems a bit absurd to me, especially since I’m in the South(general sentiment would be the concept of unions is a bit outdated). It does highlight the many different ways a blog is put together. Some are owned by an individual, generating revenue through online ads. However, some of the more top tier blogs/blog networks pay individuals to provide content, while the owner collects on the advertising and possible VC money.

Personally, I think if a union is created and bloggers strike…readers will just go to a different blog. Blogs need daily/weekly content. Without the content, the blog will soon be considered dead and readers will disperse…which I guess could be an argument for the power of a blogger union. New inovative products/ideas emerge from entrepreneurs (particularly in world of Tech) not unions. Thoughts…