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News Content As a Resource, Not a Final Product 156

Posted by Soulskill
from the also-the-book-is-a-hat dept.
Paul Graham has posted an essay questioning whether we ever really paid for "content," as publishers of news and music are saying while they struggle to stay afloat in the digital age. "If the content was what they were selling, why has the price of books or music or movies always depended mostly on the format? Why didn't better content cost more?" Techdirt's Mike Masnick takes it a step further, suggesting that the content itself should be treated as a resource — one component of many that go into a final product. Masnick also discussed the issue recently with NY Times' columnist David Carr, saying that micropayments won't be the silver bullet the publishers are hoping for because consumers are inundated with free alternatives. "It's putting up a tollbooth on a 50-lane highway where the other 49 lanes have no tollbooth, and there's no specific benefit for paying the toll." Reader newscloud points out that the fall 2009 issue of Harvard's Nieman Reports contains a variety of related essays by journalists, technologists, and researchers.
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News Content As a Resource, Not a Final Product

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  • by cosm (1072588) <thecosm3@@@gmail...com> on Sunday September 20, 2009 @10:58AM (#29482847)
    Q: " "Why didn't better content cost more?"
    A: This is the media, if their content was better, they wouldn't need to force charge people for the vast sums of shitty content they spew in much higher proportions than the actual good content.
    • Yeah, this is a perfect example of contemporary business missing the point entirely.

      Higher value = higher price. Why? Because the only money that matters is money you have now, not money you'll get 20-50 years from now, not money you'll get next quarter, only money now.

      The best content may not come at a premium up front, but people will still pay full price for it 10 years later. Why? Because it's good content and people still want it.

      Compare:

      • Video games - Madden 05 vs Shadow of the Colossus (2005). Peop
  • Great... then print news can be more like TV - where "news" (and all other shows) aren't the content, they're just the bait.

    • Re: (Score:2, Interesting)

      by maxume (22995)

      Well, HBO continues to exist, so I suspect you will still be able to buy print where you are mostly paying for the news, rather than the ads.

    • Re:wonderful. (Score:4, Insightful)

      by FrkyD (545855) on Sunday September 20, 2009 @11:26AM (#29482975)

      It's been like that in printing for years. Publishers (at least of magazines and newspapers have been talking about selling "eyeballs" for years. Ever since I did my first production job the industry has known that issue and subscription sales have only just covered the printing costs. A decade ago no one in the print industry would have been able to maintain a straight face while saying the consumer neded to carry the cost.

      And if you dont believe me, go take a look at an oldschool periodical publishing house and check out what their sales department does. In case you can't find one anymore I will tell you. They sell ads. Or rather adspace. Or rather, viewers. Just like broadcast TV.

      The bigest problem with the news industry right now is that the online advertising market isn't able to subsidize their massive brick and mortar operations like a 4c backcover ad would have done. That's because their old scarcity model no longer applies. Advertising space is no longer hard to come by, distribution is easy and there is basically no barrier to entry. IN other words, potential competition is infinite.

      Of course, like most of the content industry, the current publishing business structures are top heavy (as far as costs compared to value) or middle heavy (as far as number of non-productive jobs). We are seeing the death of the middlemen, NOT the content producers.

      Unless the middlemen and non-productive types can manage to buy the legislation they need to maintain their old business models. If they can make it impossible for me to have access to distribution again, then they might be able to go back to business as usual.

      • by Narpak (961733)
        To top that off I would argue that a large part of many newspapers (and news-centric TV channels) have a far greater proportion of material that is speculation, personal opinion, trivia or a rehash such material from earlier. The more fluff you can inject the higher your profit margin as fluff is cheap to produce, while actual serious reporting and researched balanced articles require far more work.

        One of the issues, it seems to me, is the simple fact that blogs, forums and websites are proliferating all o
      • by mcgrew (92797) *

        <pedant>
        IN other words, potential competition is infinite.

        Six billion < infinite.

        </pedant>

    • Re: (Score:3, Insightful)

      (Assuming your from the US*) That's the problem, If paid for content was more reliable/verified/trustable then people would be inclined to pay and get real news, unfortunately it seams quite the opposite is true, I trust content that's online for free BBC, wikinews, etc more than i trust print news.

      *I should probably note that the TV news we get in the UK is much more trust worthy than the print media we get here.

      • (Assuming your from the US*) That's the problem, If paid for content was more reliable/verified/trustable then people would be inclined to pay and get real news

        Nope. Lowest common denominator. One thing US news media has successfully shown is that when news is based on ratings and popularity, what you get is "news" that stokes people's fears, confirms their biases, tells them the lies they want to hear, and gives them a healthy dollop of tits and ass on the top.

  • IANAE (Economist) (Score:5, Interesting)

    by paiute (550198) on Sunday September 20, 2009 @11:04AM (#29482863)

    But look at me this morning. I am reading the Boston Globe site, for which I pay (essentially) nothing. I am accessing this site via a Comcast connection, for which I pay waytoofarkingmuch per month. Yet I get a huge benefit from the Globe, information that is directly relevant to my daily life. From Comcast I get nothing but the passing along of the signal. There is something wrong with this picture.

    If I were the Globe, I would think outside the newsbox. I would do something like set up a wireless network in and around Boston and sell internet access way under Comcast's price. The home page for this service would be boston.com or its descendant. The monthy access fee would cover the network costs and cover running the news organization.

    There are probably technical problems to this fantasy, but IAANACSM (Also Computer Science Major)

    • Re: (Score:2, Insightful)

      by slim (1652)

      It doesn't make sense.

      You're suggesting that the Boston Globe sells "ISP + news" for cheaper than Comcast's "just ISP" service? How can they achieve that? If Comcast's rates are too high, why aren't rivals already undercutting them?

      Would the Globe also close off access to their site from rival ISPs? Doesn't that undermine their advertising revenue from all those readers?

      • by jc42 (318812)

        Would the Globe also close off access to their site from rival ISPs? Doesn't that undermine their advertising revenue from all those readers?

        Indeed; if your (near-)monopoly ISP service costs "waytoofarkingmuch", the solution isn't to install a second corporation that would act as a "gateway" with a strong motive to block access to their competitors. It's to end the regulation that maintains the local monopolies like Comcast, and/or replace it with regulation that strongly punishes the sort of blocking game

  • by koterica (981373) on Sunday September 20, 2009 @11:08AM (#29482889) Journal
    If news is always a resource, and we expect to get it for free now that the distribution method is relatively free, how will we, as a community, pay for investigative journalism? Surely we can agree that news is significantly more valuable when there is someone who makes the effort to dig it up rather than waiting for it to land on their desks. I am willing to allow all the news about Brad and Angelina to be left to bloggers who just do it for kicks, but what about covered up scandals and government conspiracies (ie- NSA Wiretapping Program, Secret CIA Prisons, Torture)? I would really rather have some competing news outlets paying people to investigate things like that.
    • Re: (Score:3, Interesting)

      by slim (1652)

      The way investigative journalism has been paid for in the past, must indicate that in a free market, consumers are willing to pay for it somehow. That is, (for example) the Washington Post's management believe that by spending money on investigative journalism, they can retain readership / gain new readership from the New York Times.

      I *hope* that this principle continues in an online world. It might not be a matter of paying money for content. For example, however much you may hate advertising, you might be

    • Re: (Score:2, Insightful)

      by phantomfive (622387)
      You know, I pretty much agreed that paid newspapers did better investigative journalism until that whole ACORN scandal broke. That was just some guy who set up his own investigation and made a video to prove it. It was some of the best investigative reporting I've seen in a while.......compare it to mainstream media, which investigated such hard hitting stories as, "was Obama really born in the US?" and "Why was Mark Sanford not in his office?" or "Was Joe Wilson's apology enough?"

      Another good example o
      • Re: (Score:3, Interesting)

        by MightyMartian (840721)

        The sad thing about this was that, at one time, at least as far as the Big Three networks went, it was pretty much part of the deal with the FCC that the news departments remained independent. That's how guys like Murrow could go after seemingly all-powerful people like a certain Junior Senator from Wisconsin.

        There was a time that journalism was seen as a sacred trust, a key element of liberal democracy. While I'm sure most journalists still aspire to the high ideal, at the same time you have to wonder.

        • In the end the journalists ceased being enamored with this whole "We're with the troops!" crap and started reporting at least something vaguely resembling reality, but it took too damned long, and effectively misled the American people as to the inadequacies of the invasion and the occupation that occurred afterwards.

          The reason it took so long is because they were giving people what they wanted to hear. Most people supported the war, and they wanted to hear the good stuff. In fact, at the time, a good portion of Americans agreed with Nancy Pelosi that torture was ok. They wanted to see reports of tanks swooping in to Bagdad, and taking the place by storm. Which is essentially what happened, so it wasn't horrible reporting.

          There were some bad reports, like the looting of the museums, but they didn't have the same pr

          • There were some bad reports, like the looting of the museums, but they didn't have the same prominence.

            Which is a pity, because that was a tragedy that will be felt down through the ages. But when you've got an army effectively run by a semi-retard alcoholic, little things like the roots of civilization don't mean all that much.

    • but what about covered up scandals and government conspiracies (ie- NSA Wiretapping Program, Secret CIA Prisons, Torture)

      Have the investigations funded by somebody who has a financial interest in finding out about them. I'm sure the Democratic party got plenty of value out of any dirt uncovered by looking for this. Similarly, the Republican party has a lot of interest in getting bad news about ACORN out.

      It might require investigative journalists to gather really good evidence, but requiring that is a good i

    • You don't reckon the Acorn busting duo are raking in some bucks about now?
  • Paul Graham's essay:

    Almost every form of publishing has been organized as if the medium was what they were selling, and the content was irrelevant. Book publishers, for example, set prices based on the cost of producing and distributing books. They treat the words printed in the book the same way a textile manufacturer treats the patterns printed on its fabrics.

    Nonsense. Some paperback editions of out-of-copyright works sell for £1. A new novel by a big literary figure fill sell for £9 in paperback, £18 in hardback (with the paperback released later; the hardback price is really a 'get it first' price). A trashy mass markey novel will cost £5 in paperback. A magazine rack book of romantic short stories costs £2.50. A technical book will cost upwards of £20.

    These all cost ap

    • by c_forq (924234)
      You're looking at a resellers price, not the producer. There are still difference, but it is due to the cost for the producer (the big literary figure causes a higher cost for production). The price is in no way based on content, it is based the same way an OEM prices their products.
      • by slim (1652)

        The price is in no way based on content, it is based the same way an OEM prices their products.

        If I understand your point correctly, then the OEM's product *is* the content.

        So a novelist charges $x for the text of a novel, the shelf price of the paperback reflects that. The publisher is supposed to recognise quality(*), and what the novelist gets to charge accordingly. This is exactly what Paul Graham seems to be saying doesn't happen.

        (*) where "quality" actually means "consumer sales potential".

        • by c_forq (924234)
          Except they are basing the costs on their expenses, not on the sales potential. Chuck Palahniuk is priced the same as J.K. Rowling which is the same as R.A. Salvatore - even though they have completely different sale potentials.
          • by slim (1652)

            Except they are basing the costs on their expenses, not on the sales potential.

            Do you have a source for that?

            Basic guesses about how the world works, suggest that Chuck Palahniuk and JK Rowling pay an agent to negotiate as high a price as possible for publishing rights, and that that figure has pretty much nothing to do with expenses.

  • by RobinH (124750) on Sunday September 20, 2009 @11:26AM (#29482971) Homepage

    To build on what Paul Graham is saying, I think there's a more fundamental problem with selling "content":

    Each piece of content (article, story, etc.) tends to be a one-time use product (this is less true for movies, and not true at all for songs). But if you want to sell a one-time use unique product, then the consumer can't tell if it was worth the money until *after* they've consumed it. This creates risk and people are risk-averse when it comes to spending money (even one penny). So you can try to become known for producing consistently good content (very hard), and then sell that, but that means all the stuff you do first has to be given away for free. As soon as you start charging, you significantly reduce your audience growth rate.

    So there are other business models for content. You can become recognized as an expert on X, and then people interested in X will read about you. However, if you try to start selling advertisements or referrals for X, you start to lose credibility.

    Therefore, I think the next logical step is to become recognized as an expert on X (as a critic), then announce you're fed up with the existing offerings of X (because of reasons Y and Z), and tell your audience you've decided to go and make your own X that's much better than everyone else's X, and then you've got an audience of people who are going to be drooling to buy your X.

    • by slim (1652)

      So there are other business models for content. You can become recognized as an expert on X, and then people interested in X will read about you. However, if you try to start selling advertisements or referrals for X, you start to lose credibility.

      For a sufficiently broad X, I think there's plenty of precedents that say you needn't lose credibility (at least, in the eyes of enough readers to stay popular).

      'Home Cinema World' is an authority on home cinema, and carries oodles of ads for home cinema products.

      'Runner's World' carries adverts for training shoes, heart monitors, dietary supplements etc., and is still considered credible enough to maintain a readership.

      Now, you could argue in both cases that these magazines pander to their advertisers -- y

    • by rickb928 (945187)

      "if you want to sell a one-time use unique product, then the consumer can't tell if it was worth the money until *after* they've consumed it"

      How is this different from the previous model? Maybe it isn't supposed to be?

      One of the reasons I subscibe to a single magazine is its reputation - I count on desireable content, and I get it most of the time.

      One of the reasons I don't subscribe to a newspaper is its reputation - I count on undesireable or substandard content, and I would get it, if I subscribed.

      I do

      • by RobinH (124750)

        How is this different from the previous model? Maybe it isn't supposed to be?

        I think the environment has changed. We used to purchase a newspaper or magazine and understand that we're buying a "bundle" of information and subsidizing the content we didn't like in order to get cheap access to content we do like.

        Search engines have changed that. I'm used to finding exactly what I want without wading through a whole bunch of other junk. It's gotten to the point where I go to a brick-and-mortar store now and I can't stand how long it takes me to find something. I'm so used to typing

  • The way I see it (Score:5, Insightful)

    by noundi (1044080) on Sunday September 20, 2009 @11:29AM (#29482997)
    The way I see it this is about paid services trying to offer the same bullshit as free services do. Can anybody honestly say that they trust news sources any more than they trust gossip? The problem is that journalism used to be a respected profession, but then some publisher along the way figured "Hey we don't need to report the truth, we only need to report what's 'amazing'", and people bought it. When the internet came the cost for deliverance of these "news" was cut to almost nothing. Now these bullshit publishers, who were already living off advertisement and the cost for the paper itself was more or less the production cost minus human labour, got to reduce that last cost which was the cost for the paper, thus solely existing due to ad exposure. Some tried the hybrid model, which seems to have failed, while still offering the same bullshit content. How can anybody expect to get paid for that?

    I'm not against paid services, infact I very much hope someone brings forth a news service that reports truth, and if someone does I have no reason not to pay for it. But pay for lies? Hell I can just ring my neighbours doorbell for that.
  • Big Media does not want to sell you a product. Remember, we needed First Sale Law to make it explicitly clear that the purchaser of a product does not accept any obligations that they have not agreed upon prior to the sale to even be free to resell books and sheet music. (Hence, EULAs are nonsense, and only the law applies. It's not the EULA that forbids you from selling copies.) Hollywood would like to sell you the right to listen to some music, and ideally (for them) you would be prohibited from even rese

  • You can call it 'Fred and Barny' if you like, the owners are going to call it what they intend for it to be. As for the rationalizing rhapsody of contrast and comparison, forget it. No analogies suffice. There is nothing "like" the net.

  • micropayments (Score:5, Insightful)

    by Eil (82413) on Sunday September 20, 2009 @11:37AM (#29483041) Homepage Journal

    The concept of micropayments in the context of content has been a pipe dream for over a decade now. To businesspeople, it's one of those ideas that's so appealing they just can't let it go because they can't grasp just how complex a system it is, and how many people will simply say, "no thanks," because they don't want to feel like they're being nickeled-and-dimed to death for something they're used to getting for free. Micropayments have enjoyed some success in online gaming, but will never work in the news biz because for every site that will charge for articles, you'll find four more giving roughly the same thing away for free and living off the advertising alone.

    I don't know what the future of journalism will look like, but I can tell you that it won't involve charging the end user per-article payments or subscriptions. Anyone who thinks either of those will work for the industry as a whole in the long term is either blinded by greed or on crack.

  • Better (or at least more popular) content moves more copies. Its superiority doesn't need to be reflected in a significant variation of the unit cost.

  • [......] as publishers of news and music are saying while they struggle to stay afloat in the digital age.

    Publishers of music aren't struggling to stay afloat - they're raking it in as fast as ever. They're just whining cos they want even more.

  • by __roo (86767) on Sunday September 20, 2009 @11:46AM (#29483101) Homepage

    There are a few pretty big gaps in this article's reasoning.

    If the content was what they were selling, why has the price of books or music or movies always depended mostly on the format?

    The price of books or music or movies doesn't depend on the format. If it did, all MP3s and DVDs would cost the same, and books would be priced based on their print quality, number of pages and binding. And last time I checked, not all MP3s, books or DVDs cost the same. Books that cost the same to print often have wildly different retail prices. And MP3s -- well, there, the medium cost is nothing. The production costs certainly vary, but it's rarely the production cost that contributes to the price.

    I happen to make part of my living writing books. And I have two books, for example, that are almost identical in format (printing, length, etc.), but with over 50% difference in price because of the content of the books.

    Second, the article talks about better content, but "better" is highly subjective. Here's an example right from the beginning of the article:

    A copy of Time costs $5 for 58 pages, or 8.6 cents a page. The Economist costs $7 for 86 pages, or 8.1 cents a page. Better journalism is actually slightly cheaper.

    Personally, I happen to prefer the Economist to Time. But there are a lot of people who prefer Time. Who's right? Who knows?

    I think pricing is an odd, and probably not all that useful, way to look at this. While one reaction might be to let the market determine what's "better," I think markets are very good at determining a price for, say, an album, but notoriously bad at determining what's "better." To butcher an Oscar Wilde quote, markets know the price of everything and the value of nothing. Personally, I would throw you average Celine Dion album in a bargain bin, but there are clearly many people (and not just French Canadians!) who would disagree. And price is not necessarily indicative of anything at all. Is Radiohead's In Rainbows [wikipedia.org] "worse" because they gave it away for whatever price you happened to feel like paying?

    One last thing strikes me about the article:

    [3] I never watch movies in theaters anymore. The tipping point for me was the ads they show first.

    That's a great example of a point I thought the article only tangentially made. People go to a movie theater to meet up with friends, take out the family, go on a date, etc. The $7 tub of popcorn isn't worth $7 because of the corn in it is somehow "better." It's worth $7 to the people who get it because it's part of the experience. The "content" there is the movie, but it's the real purpose of going to a theater is only partially to experience the movie. (I'm not quite sure exactly how that impacts the point of the article, but it definitely paints a murkier picture than the article suggests.)

    • by c0d3g33k (102699)
      You're wrong, I'm afraid. The $7 tub of popcorn isn't worth it because it's part of the experience. It's your only choice if you want any popcorn at all, because the theater has you over a barrel - eat nothing or pay our outrageous prices for stale, low quality popcorn. Oh, and miss the first part of the film because the teenager behind the counter is in a semi-coma and seems to be embedded in an atmosphere with a viscosity similar to molasses, preventing him/her from moving at anything other than a snai
    • by don.g (6394)

      Personally, I happen to prefer the Economist to Time. But there are a lot of people who prefer Time. Who's right? Who knows?

      The people who prefer the Economist. Duh. I wouldn't necessarily agree with their view on things but it's a good read nonetheless.

  • The answer may lie in the quantity of content, as far as selling is concerned.

    Fact: the Internet allows a lot of free content in small page-sized elements.

    Hypothesis: want to sell content? Make it a lot bigger than a page.

    If you are a typical person, an article will often make you scratch your head. People won't buy such small scraps of information because they don't see long-term value. It's cheap for the writer to whip the stuff out, but it's selling strength is very low. The economics of buying news is s

  • Two examples that I've found useful in various online discussions:

    1) If you go into any "tech" bookstore, up front you'll see some displays of the current best-sellers. If you open them and scan the first few pages, you'll typically find a URL where you can download them in PDF form, for free. So you can get them for free over the Net, but the books are selling well, typically at rather high prices. WTF is going on here? Simple: A printed book has a lot of advantages over a PDF on your disk. (And yes

  • by LihTox (754597) on Sunday September 20, 2009 @01:03PM (#29483527)

    As some have already pointed out here, blogs do still rely on the professional journalism that comes out of newspapers and television networks. Amateurs can't hope to have the access or clout that professional organizations do, and locally we can't sit around and hope that someone in the community will make it to every city council meeting and write it up. If you've got a local journalism buff who likes to blog and has the time, great. If you don't, you need to get someone to do it, and that means paying them.

    If advertising doesn't work then journalism needs new revenue streams. Non-profits are one idea if they can get enough grants and donations and whatnot. A government service like the BBC and CBC is also an idea, but probably won't go over very well in America. I'm reminded of an idea from the novel Earth by David Brin: in that society (set in roughly 2030 if I remember right) people were required to subscribe to a particular number of news feeds in order to keep the right to vote, the idea being that a voter must keep informed about current events. Suppose that, rather than funding news agencies directly, the government gave every citizen an allowance which they were required to donate to one or more news agencies (paid for by taxes, and therefore equivalent to requiring every citizen to pay for news, but with a subsidy for low-income citizens). This would allow the people to decide which news organizations should be funded, rather than letting the government decide. Of course, there are difficulties--- what constitutes a news agency? Fox News? DailyKos? What if I started my own newspaper, circulation 1, just so I could keep the money--- and they may be insurmountable. But I think journalism is very important to this country, as important as health care and sanitation and all the rest, and something will have to be done.

  • over 6 years ago. [shirky.com] Oddly enough, I read it here first. I don't think anything has changed.

    Now, it may be that micropayments work at a level between the retailer and the wholesaler. For example, google could pay micropayments to useful sources, or I could subscribe to a news source or listen to a radio station. The author/band/whoever gets paid via aggregated micropayments, but I don't actually make a micropayment. That is, historically, a sound business model, but making people decide on an article-by-

  • No one will ever benefit from "micropayments" so long as idiot publishers hear the term and think four dollars fits the bill!
  • I think this raises a very good point about what's wrong with the free online news services today. A lot of the content is just wire service stories and corporate/government press releases passed along virtually unchanged by the news source you are reading. (This happens to be particularly noticeable in Canada, where the high U.S. content of the stories republished by Canadian news media tends stands to stand out more, e.g., misleadingly quoting statistics that apply to the U.S. economy rather than the Cana

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