Wednesday, January 18, 2006
I am not in the news business, but I think I understand one aspect of their business distribution schemes: news companies buy news bits from a single source to publish them in their own publications--it's a form of outsourcing, as not every newspaper or magazine company has the resources to have correspondents in every place where something deemed to be news-worthy is happening.
In the past, when someone was looking for a specific news-worthy event (and found it), the redundancies among sources were not that visible, since we did not have google indexing every news distributor in the world (at least the ones that let google index their sites). However, in our connected times, it now looks odd when searching for something and finding a few google-result-pages with the exact same story, from countless of "independent" news sources, and the only difference being the shell around the text.
Hence, my question: should we expect news sources to write their own copy, instead of licensing the official version?
I don't want to get into the social ramifications of having the same "official" version distributed across the globe. A more pressing issue is the one of advertising revenue.
I was searching for a particular news item on news.google.com, and I got three pages of results with the exact heading and content. Why would I, as a consumer of news, pick any of the bottom links when they are all the same and the first link-result on the list is the easiest one to click on?
All that revenue on advertising for the other dozens of sites will be gone once advertisers find out that their wares are not been properly displayed in front buying eyes. Thus, the investment of a piece of literary reality has been wasted (no advertising dollars equals decreased profits).
In this scheme, how is google making money on their news site? Well, they aren't. There is a good reason google News is still on "Beta." My one guess is that no one inside google has found a way to make money off of their news indexing project. If you notice, "google news" does not have ads anywhere around the index's home page, nor the results'.
Why not? Again, my guess is that all content indexed by google news is actually copyrighted to the originator. Thus, google can't legally profit from other companies' copy. It's a catch 22 for google--if they add ads to these pages, news publisher will ask google to stop indexing them. And if google stops indexing them, obviously, there will not be a google news index.
I don't know why google doesn't start charging news distributors to localize their sites, thus making money for everyone involved. I.e., google already tracks where you are surfing from (via their "Local" service offered on their home page). So, it is very easy for google to limit results to news sites that are deemed local to the surfer, and hence streamline those wondering eyes and take advantage of those advertising dollars. Perhaps in the future...
And so the balancing act goes: google complies with copyright laws, but it keeps accumulating all that traffic on those pages, which is more valuable (at least for now), than the opportunity cost forgone by those ads.
From time to time, google gets the rare cease and desist
letter from some news company that sells news bits to stop from benefiting from their material. Google complies, but it's hardly a problem to find other news sites to index.
In the mean time, while google is trying to figure how to make money off of their news indexing (and believe you me, they will), these distributors of information should trick google search results by becoming original and start writing their own insights into every piece.
It is easier said than done, of course. One of the main problems is very simple to identify, yet very complex to resolve, and perhaps too costly to even research.
The issue can be summarized as follows: how much revenue, from advertising, does a company need to generate in order to pay for original copy to attract more internet users? It's an issue of distribution of cost. For example, which story costs more to publish? In other words, which story generated more views for a certain advertising campaign?
As for news agencies, they face the same problems all for-profit entities do, i.e., they are businessness and subject to competition: there are countless of business out there that provide similar services, and these companies are competing for the same dollars, however, each relies on something that becomes the differentiator--the something we have come to call competitive advantage.
For news sites, the content is very important, however, the packaging can help differentiate news items from the other two hundreds companies that licensed the same content from AP (i.e., the insight of a piece). Note that if news sources are competing in a global market (now a days, which corporation isn't?), this unique perspective is very important to be different from each of the other 120 news agencies using the same provider. But of course, sometimes, just being local is a good enough differentiator--like in the good old days: B.G., granma and gradpa only read the local newspaper, which had "unique" content. (B.G. = before google.)
What was I looking for? I was searching for news on "Ronaldhino" and these are some of the results I got:
When I said there were three pages of google-search-results, I was not making it up--check out page 1
, page 2
, and page 3
of the results. I stopped at the fourth page, but I did see a few lingering results in more result pages (I sorted by date).