The New Business Model For News and Information: It’s The Content That’s All Important, Not The Platform

Philip Stone August 17, 2007

Some 70 of the more powerful names in media, information and politics gathered in Aspen, Colorado this week to discuss how old and new media can improve our lives, and the main point of agreement seemed to be that platform-centric is out and new business models must adapt to new technologies in providing news and information as quickly as possible on all platforms.

Which explains these quotes:

• Arthur Sulzberger, publisher of the New York Times:  “We are where you want to find us. We don’t define ourselves as print. We’re getting out of the mind-set that we snap a picture of the world at a certain time and present it to you the next day.”
• Arianna Huffington, co-founder and editor of the Huffington Post online news site: “The debate between old media and new media has to be over.” It’s time to “embrace the hybrid future.”
•  Michael Eisner, former CEO at Disney and now head of Tomonte Company that invests in media and entertainment companies: “Business models have to figure out how to fit into this new technology.”
• Dean Singleton, CEO of Media News that publishes 57 daily newspapers and about 120 non-dailies and who has often said the problems with the newspaper industry today are cyclical: “Newspapers are not a dying business; they are a changing business.”

Once all of this was agreed there came the realization that if it’s not the platform that counts, but rather the content wherever it happens to be disseminated, then what happens with such watchdogs as the US Federal Communications Commission that tries so hard to ensure that no bare nipples appear on terrestrial television, let alone that we should hear any foul language. The FCC is terrestrial television centric – it can’t even control what goes on US cable TV – but if it’s the content that is all important then does that mean the FCC should bow out of such guardianship, or does it mean the opposite – that Big Brother needs to take a much larger role to ensure what we see, hear, and read on, say, the Internet, fits its moral criteria, too?

It’s a chilling question that really rather worried those in Aspen. As Madeleine Albright, former US Secretary of State in the Clinton Administration, explained “Terrorist extremists are using the media themselves. The more information that’s out there about how evil they are .. it’s feeding their ego and recruitment of new people.” So should it be allowed? She pointed out that YouTube regularly has clips of violence and bloodshed from around the world, and no doubt many people believe that video is harmful and offensive but putting limits on it distribution could well be seen as stifling free speech.

Thus it was refreshing that Viviane Reding, the EU Commissioner for information society and media, was on hand to explain, “For us, freedom of expression is always first.” She said that in Europe offensive and harmful speech is judged on its content, whether it be on TV, online or the mobile phone. Europe is very mobile. We are much more relaxed than Americans.”

As ftm wrote a couple of years back, if the FCC’s jurisdiction were to include Europe it would be able to put the US budget deficit into surplus with the fines it would impose for foul language and nudity heard and seen on European terrestrial television. That Janet Jackson’s nipple showed for a millisecond and caused such consternation and fines in the US is considered absolutely ludicrous in Europe.

And as for foul language, remember the HBO series Deadwood in which it seemed every other word uttered by most characters was foul, really foul. And yet the French language Swiss public service broadcaster showed 12 episodes over six nights  a few months back – admittedly at an hour when the kiddies should have been in bed -- and broadcast it in dual channel audio  meaning those with stereo TV sets could choose to listen to either the original English soundtrack or the translated French.  Don’t know how the French translation went, but in the English there was not one single “beep” and remember, this was terrestrial TV.

As for changing business models, there seemed to be general agreement at the Aspen Forum that all media companies today are indeed revisiting their business models basically because the consumer has taken over and has decided when something will be read or watched.

For instance NBC can no longer dictate that the first opportunity an American will have to watch an American win a key athletics race from next year’s Beijing Olympics will be to tune in to the terrestrial network at a specific time when it will show the tape of that race that occurred much earlier in the day. Those days are now gone.

Which is why NBC has already launched its Olympic web site a year before the Games. NBC plans to stream some 2200 hours of Olympics coverage and show some 3000 hours of highlights.

NBC learned it from last year’s Turin Olympic Games in which it lost some $70 million that it had to revise its business model. It saw that NBCOlympics.com was a big hit, however, with the site showing millions of video streams and achieving hundreds of millions of page views. The network admitted it was very surprised then by the enormous appetite for online video coverage, and has planned accordingly for the Beijing Games. When all the smoke clears it will be interesting to see how much it earns from its terrestrial and cable coverage and how much comes from online.

And then there’s Dean Singleton who now owns much of  the daily print media in the San Francisco Bay Area. His new business plans for many of those newspapers started with consolidating back office functions and then he figured why not do that with editorial, too, and have all journalists basically as one big pool and, by golly, that means one basic newsroom and the non-union journalists now outnumber the union journalists so there’s no longer any need to recognize the newspaper guild. The guild, of course is protesting to the Feds, but it’s a good example of what Singleton means when he continually says that business models are changing.

And does the consumer care? If the consolidated newsroom means that some local issues are passed by in both print and online then consumers will vote with their feet, but if the editorial product remains pretty much the same even though there are less people producing it, then the consumer won’t really care. It’s not how you get the product to market but rather what product it is that you bring to market.

Singleton appeared in Aspen on a panel with that nemesis to the newspaper industry Craig Newmark, owner of Craigslist that is said to have cost the US newspaper industry hundreds of millions of dollars in lost advertising revenues.

Singleton’s view, however, was that it is no good blaming Newmark for today’s malaise in the newspaper industry.  “It isn’t Craig’s doing, but innovation at its best. It’s nobody’s fault; it just happened,” he explained.

But he did admit that once Newmark had made his mark it forced the newspaper industry to change business models. “It’s hard to compete with free!”