Message From Michael - The Cost of Free - August 5, 2009

Message From Michael                                 

                                                                                                                        August 5, 2009                                                                                                                                                                                                                                                                                                                                                                                

      BORN FREE, AS FREE AS THE NEWS FLOWS

      NEWS NEAR YOU - MAYBE

      FREEDOM’S JUST ANOTHER WORD

      THE REBELLION CONTINUES

      CRONKITE-JOURNALISM FOLLOW UP

 

We encourage people to pass on copies of Message from Michael.  But if you would like to get your own copy, you can subscribe by sending an e-mail to Michael@MediaConsultant.tv with the word “subscribe-MM” in the subject line. 

 

      BORN FREE, AS FREE AS THE NEWS FLOWS:  That has been true practically since the Internet started.  News and so much else has been free.  But to steal another line from the 1960’s film and song, several major players in the news business are saying it will no longer ‘stay free, where no walls divide you.’  The wall is a subscription-based entrée into some sites.  That is the pragmatic response to a declining advertising environment.  The philosophical argument against this centers around a new book by Chris Andrews, editor for Wired and author of the book The Long Tail.  In his latest book (Free, the Future of a Radical Price) he argues that ‘free’ is a basic expectation in the new digital online environment.  In very, very simplistic terms, the argument goes something like this.  In the old media world, price was determined by shelf space.  You had only so much shelf space to store your books and it cost more to store more.  No longer.  For example, in 1961 a transistor cost $10; two years later it had dropped to $5; by 1968 it was a dollar; today with billions and billions of transistors flooding the market, a single transistor costs about .000055 cents.  Therefore that cost is reduced.  Then, he argues, if you don’t provide it free – someone else will.  And, of course, people prefer free.

As a SIDE NOTE to all this, if you don’t want to pay for Andrews’ book, you can watch his presentation at the Disruption By Design conference on the Wired website (http://www.wired.com/wiredbizprogram).  Or you can read an interesting analysis by The Tipping Point author Malcolm Gladwell on The New Yorker website (http://www.newyorker.com/arts/critics/books/2009/07/06/090706crbo_books_gladwell?currentPage=all) .

      NEWS NEAR YOU – MAYBE:  The prime example of ‘free’ in the digital (emphasis on that word) online world is YouTube which is incredibly successful when judged in terms of users and brand recognition with its 20 hours of video being uploaded every minute.  But it’s less successful, critics point out, when you consider that -- in financial ‘speakese’ --   YouTube has not been able to establish a successful business model; Or, in blunt non-speakese, YouTube is bleeding red ink.  However, that hasn’t stopped YouTube which now has a new model which (depending on your perspective) enhances or threatens the news equation – News Near You.  As reported in the New York Times and elsewhere, YouTube is asking news outlets to partner with the video giant in supplying news videos for use on their News Near You site.  Supporters say it extends the brand and reach of news outlets while critics say it will end up being another example of the “frenemy” development some associate with the Google partnerships.  The website will provide you all the videos produced within 100 miles of your location which makes this both scary and interesting (again, depending on your perspective).  I say that because of the tracking capability of the Internet.  For example, you know how you can sign on to a website and, even though you haven’t indicated anything, it automatically detects that you’re in the Atlanta area or the Chicago area just based on your ISP provider and IP provider.  The New York Times article goes on to say that a new ‘breed’ of local news broadcasters is emerging – ones who don’t need a broadcast license – like schools, churches, advocacy groups and individuals – and that in the future, much of the News Near You content will come from “people who do not report the news for a living.”

As a SIDE NOTE to this, you will recall from previous Messages that YouTube has established a reporter training system. After some recent scratching around the YouTube site, I found the Reporters’ Center again, but I have not found the News Near You site.  I did find World News with Charlie Gibson, Good Morning America, PrimeTime and 20/20 under the Shows tab in the News category; Under the Channels tab in the news/politics category, you’ll find CBS, Associated Press and Al Jazeera.  And all of the sites right next to ones whose news credentials are… well, questionable.

      FREEDOM’S JUST ANOTHER WORD:  Despite what Janis Joplin says, News Corporation poobah Rupert Murdoch doesn’t believe there’s nothing left to lose.  He says news organizations stand to lose money and that’s why he plans to start charging for access to his newspapers’ various websites within a year to fix what he (and others) call the ‘malfunctioning’ news business model.  Murdoch, of course, has the model of the News Corp-owned Wall Street Journal to build on.  Lionel Barber, The editor of the Financial Times (which also has a successful online subscription model), goes even further, predicting all newspapers will go to a subscription model in the next 12 months.  And both The New York Times and USA Today have indicated they are looking at online subscription models.  And for good reason.  If you look back at The State of the News Media report by the Pew Project for Excellence in Journalism, online advertising only accounted for $3 Billion of the $38 Billion in advertising revenue in 2008 for newspapers – and that $38 Billion was a fourth lower than the $49 Billion the industry made two years earlier.  The PEJ report says though that online advertising alone will not sustain the newsgathering operations at the level the print operations had supported.  Of course that hasn’t stopped several newspapers from making the switch.  The latest is the 174-year-old Ann Arbor News which is transitioning to an online only model similar to that adopted by the Detroit Free Press/ Detroit News with a twice-a-week print edition.    

      THE REBELLION CONTINUES:   This time it’s the Associated Press leading the charge with an announcement that it is creating a “news registry” which will digitally track how the AP and, later, member organizations material is used to make sure it is ‘not misappropriated’ and “potentially create new ways for the 163-year-old news cooperative and other media to make more money on the Internet.”  The AP says it is just another way to protect the journalism.  However, the rebellion has spawned a counter-rebellion from bloggers and news sites.  The question revolves around what is legitimate use of news material.  Meanwhile several major publishing companies have joined forces with a company in California called Attributor to create what it calls the Fair Syndication Consortium.  Some of the companies include The New York Times, Washington Post, Conde Nast, Hearst, Reuters, McClatchy and Conde Nast.  The problem is the major aggregators (aka Google and Yahoo) have reacted “coolly to the proposal” as the Times says in an understatement in its report on the proposal.  Very simply, the plan is for publishers to share in the revenue generated from any site that copies their news stories.  In very much a similar vein, European publishers called on the European Commission to provide more copyright protection for news operations.

As a SIDE NOTE to all this, a quick search by yours truly found numerous sites offering to provide free news content to websites – freshcontent.net, freecontent.net, freenewsfeed.newsfactor.com, freenewsarticles.com, rssfeedreader.com, freenewswebsite.com.  And the list goes on.  Interestingly many of the websites cite traditional news organizations like Reuters and the BBC as source material. 

      CRONKITE-JOURNALISM FOLLOW UP:  Many of the leading journalism and ‘citizen journalism’ sites have joined forces to create a inter/national non-profit Investigative News Network.  Some of the luminaries involved include Investigative Reporters and Editors (IRE), Huffington Post, NPR, Stateline.org, the Pulitzer Center for Crisis Reporting, USC Annenberg School, Walter Cronkite School of Journalism and Mass Communication and the list goes on and on.  By my count, thirty prestigious organizations have signed what they call The Pocantico Declaration “to nourish and sustain the emerging investigative journalism ecosystem.”  Even with all the journalism do-gooders and save our soul sites coming out, watch out for this one.

It seems likely a weekly occurrence – I send out an email and immediately find several sources or notes that I missed and/or that my really, really smart Message  readers have caught.  That is true, yet again.  I didn’t mention the founding of the INN in the previous MfM about Cronkite and Journalism.  Thank you to Rebecca Coates-Nee of San Diego State University for pointing this out.           

      SUBSCRIPTIONS:  If you wish to stop receiving this newsletter, e-mail Michael@MediaConsultant.tv with the word “unsubscribe-MM” in the subject line. Also, back issues of MfM are available at the website, media-consultant.blogspot.com.  You can reach me directly at Michael@MediaConsultant.tv.