David Carr is looking for a new business model for news, and says it needs an iTunes. Part of what he wants is to charge for the articles, and, you know, good luck with that. (Times Select, RIP.) But part of what he wants is simply the elusive new online revenue stream that will pay for the newsroom.
Well, it already exists. It’s called Google text ads. It’s ad revenue tailored specifically for the Web environment. It works, and it’s already bringing considerable sums in to many Web sites. It lets little guys and big guys play on the same field.
The problem is, it doesn’t bring in as much cash as newspapers want, or have traditionally expected. And of course, from the music companies’ perspective, neither does iTunes.
The news industry knows how to make money online, just like everybody else. It just doesn’t know how to make as much money as it used to offline. Carr’s piece is strangely silent on this obvious observation. For someone who is trying to think out loud about this situation, he is displaying a peculiar blind spot.
Unfortunately, as a result, his musing simply prolongs the day of reckoning for the industry. He continues to hold out hope for some elusive profit-generating magic formula, instead of helping the business face the reality of a new world in which there’s simply far less money to be made.
UPDATE: Jeff Jarvis’s comment: “The real fallacy in Carr’s delusion is that a news story or an opinion, like a song, is unique—that you can’t get it somewhere else and so you have to buy the original.”
Post Revisions:
- January 12, 2009 @ 09:28:32 [Current Revision] by Scott Rosenberg
- January 12, 2009 @ 09:23:45 by Scott Rosenberg
I think an iTunes for news would be a brilliant innovative idea. We can even have a brilliant innovative name for the newscasts carried by iTunes.
I propose we call them “Podcasts”.
Google ads are working for everyone? Hardly. I’m surprised that you’re still spouting ad revenue-based ecosystems in this economy. The fact is that they work for the select few that are big enough to have a Google account manager, or have enough time to sift the wheat from the spammy chaff.
Other than that, great article. :)
Depends what you mean by “working.” I mean “functioning,” not “providing as much revenue as I want.”
Google ads are not a panacea. I’m thoroughly aware of their limitations. My point is, Carr’s “iTunes for news” wouldn’t be a panacea either. The problem is that Carr — and so many others in the news business — think that they are going to be able to replace the high margins and monopoly rents of the old news business. And they’re not.
The real fallacy in Carr’s delusion is that a news story or an opinion, like a song, is unique—that you can’t get it somewhere else and so you have to buy the original.
That’s why music can still make money and newspapers can’t. Good insight!
Excellent observation about newspapers not figuring out how to make as much money online as they make in print.
The answer may be (and I’d argue probably is) scale. However news is catered to niche markets (i.e. the local paper) that have difficulty scaling to sizable audiences at current impression rates.
There are two options. One, raise CPM and CPC rates and risk losing ad money to those with lower rates. And Two, scale to a larger audience share.
Hiding behind a fantasy of transactional models for a commodity like news is a disaster.
In case you’re wondering what it could look like:
http://www.vanityfair.com/online/culture/2009/01/12/what-itunes-for-news-would-really-look-like.html
Carr also ignores that Newspapers rely on Ad revenue far more than subscriptions. Selling electronic subscriptions via an iTunes – like store would not provide a significant new source of revenue.
Depends on how you view News. News already has a successful online business model. Practiced by companies such as Thomson Reuters, Bloomberg and Reed-Elsevier Group, this model is based on selling focused, actionable information (news) to professionals for use in their business. When the dust eventually settles, it may be that delivering news with content wide in scope but shallow in depth doesn’t have much of an audience.
“The real fallacy in [David] Carr’s delusion is that a news story or an opinion, like a song, is unique—that you can’t get it somewhere else and so you have to buy the original.”
That’s Jarvis spouting off his usual philistinism. Just because his words and opinions are fungible doesn’t mean everyone else’s are.
There exists another device for reading the online news besides the iPod: it’s called the Kindle. I write about it at my blogsite, The Business Insider, in the marketing channel: http://www.timrosablog.com/main_blog/marketing_communications/