Tuesday 3 August 2010

If you don’t like toffee adding an apple won’t make it taste better (a toffy apple approach to news)

We live in a society where entitlement is seen as a right and no longer needs to be earned. The preoccupation with one's self and the constant need for satisfaction of our every need appears to be an all persuasive trend and like the flu in winter time is also very catching. The state of play in society however does provide for a two-way street, for companies and industries that embrace this need of their customer’s. The path to success for these organizations will be paved in gold, however for industries that have not yet recognised this and that are in fact having their own delusional thoughts of entitlement, their paths detours somewhat and lets just hope that no one has turned the light off in that tunnel just yet.

I think that the newspaper industry is a classic example of an industry that is failing to adapt to the new digital landscape and that the unprecedented success in their past has created a sense of entitlement, but in this new landscape they have neither adapted nor are they ready to compromise. This attitude does not bode well for them, because other leaner, fresh thinking organizations such as Apple Corp don’t have the baggage of the past and so only have their eyes firmly planted on the future. Hiding in your shell and demanding that all others do the same, or adopting an ostrich like position with thy head placed firmly in the sand does not a sound business model make, yet any astute observer of the newspaper industries both here in Australia and abroad may have noticed this very stance.

The early and most successful news aggregation and distribution models favoured big media. There were considerable barriers, being the high costs of entry, technological restraints as well as government regulation that all but conspired to keep news gathering and distribution in the hands on the minority. The news was owned by big media, they traded in this commodity, they controlled access and content, they were the licensed purveyors of news and if we wanted access we played by their rules. The internet changed this and big media have failed to adapt as yet.

I believe the problem is that we have two news models here and that although the newspapers maybe dabbling in both, they neither understand the internet nor realise that they require different strategies for each. When the internet first arrived newspapers were in the strongest position to avail themselves of the advantages that this platform held. They were the gate keepers of news and on the internet “content is king” and so they appeared to hold all the cards. They initially just took the newspapers and posted the stories online with html reproduction of their print editions. It did not take long for new and aggressive players to enter the market and offer up new and innovative competition, the rules were different online and a static page became boring very quickly. The newspapers have struggled and like the music industries before them have decided that competition needs to be tainted some what so as to swing the pendulum back their way. The way the old incumbents see it, is that without them there would be no news, so either protect them or suffer the consequences.

Currently there are a few high profile methods being adopted by the newspaper industries in their hope to compete with the new media, each method is interesting in its own right. There is the paywall and walled garden approach of charging subscribers for your content. This approach may very well provide the answer for some type of speciality comment and opinion sites. For most newspapers I however don’t think this is the answer or will provide the solution they think it will.  Because for the majority of sites, news is perceived as such a generic commodity that users can and will easily source it elsewhere at no cost if they are not willing to pay or they perceive no added value. Time will tell if this strategy will work as Rupert Murdoch’s News Corporation intends to implement this across all his media empire and so the experiment begins.

Another tactic being employed by the incumbent media organisations is to try to revive an old tactic of locking down the news with the Hot News doctrine. Hot news is a long recognised but seldom used common law doctrine that assigns a temporary property right to the reporting of a hot news item, similar to copyright but obviously with a much shorter expiration period. Copyright has in the past as is now, has been used to protect the economic interests of the creator’s of semi intangible ideas and concepts allowing them to assert ownership over said concepts for a pre determined period of time. Thus allowing them to profit from their work and stimulate the further creation of ideas and works by others in providing an artificial mechanism of protection from theft. The doctrine has not been widely abused or used as yet and I am of course hoping that it will this not happen, but coincidently some news headlines lately have floated the idea of hot news being a good idea worth exploring.

Finally the last method that is being tried and adopted is that of offering content through applications designed for specific devices such as iPhones and iPads and the use of others walled gardens to extract a payment for their content. This approach is interesting and could well provide the answer for some, although I still subscribe to the argument that free alternatives would still attract people not willing to pay. However this method and platform adoption does offer many customers easily accessible content that adds value to their experience and they are willing to pay for. The iTunes store has been a very successful platform for Apple and content creators alike so it really is no surprise that newspapers might approach it like it will provide the saviour to their industry. The interesting thing is that nothing has ever stopped the media companies from developing and applying this approach them selves before Apple arrived on the scene with their solution. And I suppose that’s the real rub, of my argument against this industry I believe it is all about innovation and I keep failing to see it from this industry.

However I think that as I said earlier in this piece both the internet and the old tangible product are two different markets and should be approached differently but it would appear if the pricing strategy for SMH is anything to go by, their iPad app and subscription service is designed to do nothing but prop up the old print edition by boosting subscriber numbers and I assume the price they can sell print adverting for. mUmBRELLA has an excellent opinion piece that you can read here Bad enough the SMH iPad app is just a PDF, forcing a print subscription is insane that details the whole deal as well as pointing out that the actual app is not much chop anyway. So here we do again have to wait for the outcomes to this experiment.

Now that the barriers to entry are no more that a PC and an internet connection these huge media conglomerates are hemorrhaging money, and blame their woes like so many other industries that have found the landscape has shifted and that they now must compete not only with internet but with those who understand how to use and exploit it better than they do. The only analogy that I can think of is if only the horse-drawn buggy industry had fought a little harder we may not have the scourge that is the modern motor vehicle and that carbon emissions would be so much lower than they are today. Or is that just folly as it is with the newspaper industry? I believe these industries need to realise that they need to adapt and adjust to the new medium pretending you still hold the reins on control is just embarrassing as so is their inactions to date. The internet has made many people rich, not because they stole from legacy industries but because they adapted to the changing landscape and most importantly worked out who their customers were and who was going to pay, and most importantly these are not necessarily always the same.

What do you think? Do you have an iPad? Are you going to subscribe to any newspapers apps? Leave me a comment.

This article was based on and used previous material that I had previously posted on the internet.


  1. It's spelt "toffee", dude.

  2. thanks dude, know that our American friends don't, however for you updated and corrected