Saturday, July 15, 2017

The “Desperate Media” and the Brothers Grim (FB & Google)

This article examines the recent attempt by the traditional print media (newspapers) to regain some relevance in the digital age by trying to negotiate concessions with Facebook and Google. The article explains the efforts by the newspaper trade group to establish itself as a bonafide representative of all major news outlets in its fight for more advertising dollars as credit for the content currently provided for almost nothing to Facebook and Google users today.

Recently, the leading industry trade group representing newspaper publishers – the News Media Alliance – surfaced an interesting plan to source advertising revenue and ward-off the slow-but-steady march to obscurity and bankruptcy. The plan, in its base form, involves attempting to use the union-like representation for newspapers publishers to negotiate without running afoul of anti-trust laws around collusion, through special legislation that then gives this the News Media Alliance some leverage to shakedown Facebook and Google by negotiating a cut of ad revenue generated from news articles generated by these publishers that is consumed, redistributed or aggregated via the site or search engine. Setting aside the fact that this effort reeks of bold-faced desperation, there are some more fundamental elements that will determine how this evolves for the future of news, advertising and online information dissemination. The three points I want to draw out of this article as as follows:

First, is the ironic fact that the representative of an industry that prides itself on independence from government, is asking the same government to grant its union representation safe harbor immunity from prosecution for its attempt to collude to extort money from an innovator due to the lack of evolution and innovation by its members (social media laggards).

Secondly, there is the whole issue of revenue attribution. Who gets to claim what in the chain of information flow on the internet. There are a number of unanswered questions here about the value of the product relative to the advertising dollars assigned to news consumption. For example, can we use click-through rates where the ultimate product the is the amount of time spent on an newspaper article site via FB or searched using key words on google to arrive at a value for the “product”? Is this the best measure of value? The devil is in the details here, as there is no easy method or metric that can be adopted to arrive at a number that is readily fair and balances to both sides (pun intended).
Lastly, there is the question around relevance. Should FB and Google really have to share their advertising revenue with these publishers simply because they (the News media Alliance) refuses to evolve? As more people create social media-focused business models that serve news in a direct-to consumer fashion online like Buzzfeed, it becomes incumbent on the publishers to adapt to new technology by modifying their primary method of delivery that gets them to their audience using current technology in the most advantageous manner without having to resort to begging for a slice of someone else’s pie.

No comments: