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May 18th, 2009

Categories: News industry

I keep looking for other things to write about, but the newspaper industry just keeps giving me great posts to write.  Let’s first look at this Washington Post article that pretty much argues for ending all the useful innovations of the internet to save newspapers.  It’s written by two former newspaper lawyers, but the Washington Post wouldn’t be swayed by that kind of conflict of interest.

Michael Masnick does an already perfect job of dismantling the outrageous arguments in the article. To summarize, the authors, Bruce W. Sanford and Bruce D. Brown, seem to be calling for an end to search engines and fair use while expanding copyright law to cover “hot news” and allowing newspapers to violate antitrust laws (while still offering them tax breaks).

But all this talk of saving newspapers still ignores why newspapers are more important than news. Newspapers are not the only source of journalism and any legislative attempts to save them only support an obsolete business model. Masnick cites from Dale Harrison’s comments on the Post article.

A lesson worth remembering is at the turn of the 20th century people had a transportation problem…and the solution turned out not to be a “faster horse”…but a Ford.

And one should note that the Ford didn’t arise out of the “Horse Industry Revitalization Act”.

I think the future of the media business will look as different as Ford and Toyota’s operations look from horse traders and blacksmiths.

Imagine what the passage of such ill-conceived legislation would have done to the car industry a century ago.

Harrison goes on to show that newspapers, for decades, had a monopoly on distribution. This lead to inflated advertising prices and likewise inflated budgets (much of the reason newspapers are in trouble now is the massive amount of debt they acquired during the bubble 90s). This monopoly distribution is dismantled with the internet, forcing advertising prices down to real market values and giving customers almost infinite choices for their content consumption.  Because of this basic economic fact, newspapers cannot sustain the business model they’ve been using for the past century.  It’s time to evolve.

But we’re scared if we lose newspapers, we lose journalism because none of these bloggers or aggregators create content.  If that so, then why is Maureen Dowd getting accused of plagiarizing a blogger? I’ve already criticized Dowd’s incredible misunderstanding of the internet and newspaper economics as well as her accusations of copyright infringement at Google (even though Google only links to content).  I actually have no problem with Dowd copying the blogger (she can copy me anytime) – plagiarism can actually be a good thing sometimes – but Dowd’s hypocrisy shows that 1) newspaper journalists are not perfect and 2) some bloggers can apparently write really well.

Also, let’s note that bloggers exposed Dowd’s plagiarism and pressured her to update her column online (and a correction in the Times).

Thankfully, not every newspaper wants to remain in the 1980s. John Naughton writes for the Guardian saying capitalism will eventually kill off newspapers that can’t evolve, leaving the market winners to better understand how to run a news business (not just paper) in the 21st century.

The problem at the moment is that the web is awash with free content, and in a competitive market the price always converges on the marginal cost – which is currently zero. But as providers disappear (or, like Murdoch, decide to charge), the supply of free news will diminish and something more like a normal market will emerge. Only then will we find out what people are willing to pay for news.

That takes care of the economics. But what will journalism be like in the perfectly competitive online world? One clue is provided by the novelist William Gibson’s celebrated maxim that “the future is already here; it’s just not evenly distributed”. In a recent lecture, the writer Steven Johnson took Gibson’s insight to heart and argued that if we want to know what the networked journalism of the future might be like, we should look now at how the reporting of technology has evolved over the past few decades.

The future is now. See if you can catch up.

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April 16th, 2009

Categories: News industry

Shockingly, I read newspaper…content. Like most Wednesdays and Sundays, I enjoy Maureen Dowd’s dry wit and political commentary. She’s brilliant and kept me sane during much of the election (except for when she wrote her column in French and Latin). But today, Dowd’s column took aim against a true evil, Google, for destroying newspapers.

Dowd, in skillful style, made no question about Google’s culpability. She just compared Google to Big Brother and said while Google’s C.E.O. Eric Schmidt isn’t Dick Cheney, he isn’t far off.  He hates your privacy, but he hates newspapers more.

Dowd is a columnist, and I love her for her opinions.  But this column ignored the basic economics and facts of newspapers’ relationship with Google.  She makes it sound like Google it’s just taking content, posting it, and then laughing as newspapers suffer. She writes “Google is in a battle royal over whether it has the right to profit so profligately from newspaper content at a time when journalism is in such jeopardy…[Schmidt] declines to pony up money, noting that newspapers could opt out of giving their content to Google free and adding, ‘We actually like making our own money for obviously good capitalist reasons.’”

But Google does not take newspaper content or post it (with the exception of Associated Press content which it explicitly pays for), Google just links to the content.  Google, in fact, only added ads to its News search the beginning of this year. Before that, Google made no money directly from news search. But either way, Google just links to news articles.  It helps people find the news articles they want.  Google sends thousands if not millions of people to newspapers through these links.

But Dowd, instead of realizing how much Google increases the value of her content, tries to paint them as just a step behind Dick Cheney in taking over the world.

Newspapers as a whole need to stop looking for people to blame (Techdirt has the excellent point that Craigslist deserves just as much if not more blame for “stealing” all those classified ads it doesn’t charge for).  Dowd is just another newspaper veteran looking to protect newspapers without asking if there’s a better way.  Just because you’ve always done it one way, doesn’t mean business can’t evolve.  Look at how newspapers used to do business – they lost money. Weird.

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