Tuesday, March 30, 2010

Misperceptions in the digital ecosystem

Recent discussions in “legacy publishing” circles (owners and managers of print newspapers and magazines) are trending toward agreement that the quality of the content (what we used to call “news and information”) matters more than the bells and whistles of technology and interactivity. Typically, the question is whether “general interest” content providers (large newspapers and magazines like Time, Newsweek, the New York Times, the Los Angeles Times, etc.) can survive without making drastic changes.

The issue, of course, is that much of what these general interest publications provide is now available for free up and down the Internet. Online publishers are generally now taking one of three directions:
1. They are using free or inexpensive content by aggregating stuff floating around out there or by using writers (typically opinion columnists) who provide their stuff free or nearly free. These sites tend to be either political or sleazy (or, in the case of sites like Huffington Post, a little of each) with a high level of unmoderated interactivity (like a place to post anonymous comments at the bottom of each story without the fear of accountability). We won't, of course, discuss purely puerile or pornographic sites -- they are in their own league.
2. Sites like the Christian Science Monitor that are betting they’ll be able to produce such high-interest and unique news and information that they’ll generate enough valuable traffic to become ad-supported. There are two major issues here: First, they’ll have to put a stop to anyone attempting to take their original reporting and posting it elsewhere. The law remains fuzzy on this, particularly when it comes to sites that don’t require subscriptions to view the material. Second, they’ll have to figure out how to create advertising that people actually at least glance at to create value for their advertisers. This works best if you can combine a print/online complementary ad strategy, which CSM seems to be at least modestly pursuing through its weekly print edition. Other larger, more global news organizations like the New York Times and Wall Street Journal are either employing or considering pay walls to supplement advertising revenues.
3. The seemingly forgotten segment in this debate is highly local web sites whose specialty is broad, deep, unique and unrelenting local news for a comparatively small geographic area. These are almost exclusively operated by small daily newspapers across the country, of which there are approximately 1,200. These are not “general interest” products; rather, they are obsessively local products that can’t be replicated without the combining the resources of the legacy print product with the future promise of online. For these operations, paid subscriptions remain a real part of the revenue mix.
“In reality, the world is almost exactly the opposite of how many see it today: It is the technology that is commonplace and the quality content that is unique,” writes Jim Spanfeller, former president and CEO of Forbes.com and the treasurer of the Online Publishers Association. “What a shame that many of today’s content companies will not be around to profit from the sure-to-come better understanding of the digital ecosystem. Why? Because they, themselves, are among the core promulgators of these misperceptions.”

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