By paulgillin | May 29, 2008 - 8:00 am - Posted in blogging, BusinessModel, Journalism, NewMedia, Newspapers

The biggest reason the newspaper industry is going off a cliff these days is that the rules of its business have changed. For the last 200 years, the value of newspapers has been based upon information scarcity. Ordinary citizens couldn’t easily learn about what was going on in the world around them, so they needed newspapers to fill that gap. Information is now cheap and plentiful, a fact that severely undermines the value proposition of many media.

The quicker media executives accept this new reality, the quicker they can put their organizations on the path to a better future. This is what was going through our mind as we read a couple of blog posts this morning.


Mark Hamilton writes about the futility of challenging Google. He cites a $70 million suit by Belgium’s media agency, Copiepresse, against Google for linking to its content (this is apparently illegal in Belgium and Google had to stop the practice there). Matthew Ingram’s commentary on the affair compares Copiepresse to “someone who is determined to saw through the tree branch that they happen to be sitting on.”

Hamilton also points to last week’s decidedly tongue-in-cheek anti-Google tirade in BusinessWeek and concludes, simply, “The debate is rather pointless, given that Google isn’t going away. Nor, given its heft, is it likely to radically change the way it does business.” Sound advice.

Just as King Canute famously failed to hold back the tide, the anti-Google agitators are engaging in a futile rant against the inevitable. The legality of deep linking was established more than a decade ago, at least in the US, and link culture has become far more embedded since then. The Internet is a public utility and anything that anyone publishes on it is public information. While copyright protection still applies (though less and less successfully), secrecy laws don’t. You post it, it’s public and others can link to it. End of story. If you don’t like that, then don’t post it or figure out a way to make a living in the context of this new reality.


Jeff Jarvis is gleeful over the Justice Department’s antitrust settlement with the National Association of Realtors that forces realtors to open the Multiple Listing Service to discount competitors. This means that realty databases like Zillow will have the chance to compete on a level playing field.

“The only reason…that Realtors could hold onto their high commission for such little value and work is that they kept information away from the marketplace, making it inefficient,” he writes. He quotes Umair Haque: “Competitive advantage is fundamentally about making markets work less efficiently.”

A dozen commenters pile on Jarvis in defense of the realty industry, but they miss the point of his tirade. The villains are not realtors but an industry that withholds information as a source of competitive advantage. Once low-cost competitors have access to the same information as the people earning 6% commissions, the market becomes more efficient and more competitive. The high-margin brokers can still maintain their premium prices, but they have to come up with a new way to justify the expense.

The Internet levels the information playing field. Trying to legislate who can and can’t see public records is wasteful and ultimately futile. If you’re going to play the game, then be ready for the consequences and be innovative about changing the rules. Some media executives have already figured that out, and they will prosper.

Hoax Dramatizes Media’s Value

Alan Mutter scolds the perpetrators of a recent online hoax about a 13-year-old boy who stole his dad’s credit card and used it to hire hookers to play video games with him. The stunt was apparently an exercise in linkbaiting, with the goal being to drive the story’s Google ranking as high as possible.

While it’s regrettable that the story spread as widely as it did – even landing in some legitimate new sources – it’s also an example of the value that branded media can bring to the Internet. “The steady pollution of the web with phony and malicious info-junk could turn an awesome resource for humanity into little more than useless, time-wasting digital flotsam,” Mutter writes. But we think that irresponsible behavior is a necessary byproduct of openness. The media have an important role in setting the story straight, and examples like these only highlight the value of trusted sources.

Misinformed Views of Media Bias

Writing in American Journalism Review, Paul Farhi makes a persuasive case that the public’s distrust of the media isn’t justified. Among his assertions:

  • “Media” is too broad a term. Asking people to evaluate the trustworthiness of media is like asking them to rate the honesty of politicians.
  • A lot of visible people make it their business to trash media credibility, regardless of the facts. These people have a strong influence on popular opinion.
  • People don’t understand news reporting and so interpret reports they don’t like as evidence of bias.
  • Most people don’t consume enough news to make an informed judgment.
  • If you look at the facts, the reality is that most media is pretty fair.
  • What’s perceived as bias is often just intense focus on an issue that’s important to the public.

Nevertheless, Farhi concludes, people will believe what they want to believe. The trend in media is toward more opinion and less objectivity. That’s unlikely to change. (via Romenesko)

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This entry was posted on Thursday, May 29th, 2008 at 8:00 am and is filed under blogging, BusinessModel, Journalism, NewMedia, Newspapers. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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