Will Google pay Journalists, too?

For some reason, I think a lot of people try to copy the model of music industry to news industry. True, there are some similarities.
1. Long time ago, people could only paid for it.
2. Not too long ago, people learned how to receive it for free, legally or illegally.
3. Both industries want users, or somebody else, pay for them, and are working on this direction.

The key point might be, it was illegal to download mp3 for free, and it is illegal now. (Most of the case.) But news articles, video, photos are now legally free online. (And you don't even need to search for it, they are just everywhere.)

There for, from downloading illegally to legally, users' utility rised. As long as the price matches the marginal utility, people might pay.

Then how can we add some value to online news, so that users will pay?

Better way of selection and organization? Google does it well, at least a great number of users think so, but Google doesn't care if it gets paid from users.

I'm still think the mp3 downloading example in China. Will Google pay news organizations, too? (Then Sung Woo's topic will be popular!)

Gladwell is closer to right than Anderson

Some thoughts on Gladwell's review of "Free: The Future of a Radical Price" and author Chris Anderson's response:

• Amazon can refuse to pay newspapers for content all they want, but at some point it will drive newspapers out of business and there won't be any content.
• Anderson's experience of shopping out his hiring of writers for GeekDad doesn't constitute a trend.
  
• Chris, Gladwell is threatened because he perceives this thinking as influential.
  
• Blogs love to laugh at newspapers and journalists as they freak out about the future of the industry, but take a look at a site such as Daily Kos: most of their frontpage content links to and criticizes newspaper journalism.
  

Google/Facebook music services on the way

Our class apparently has its finger on the pulse of new media—almost as if they heard our discussion on Tuesday, Google and Facebook announce music initiatives.

The Numbers Add Up

Where oh where has the model gone? All of the words from Malcolm and Belo folks are just, ehm, words. Instead of fighting the inevitable future, why not pose a workable model that goes around the problem? Better yet, why not make the problem the solution?

So publishers feel like they're getting hijacked because folks like Google are allowing access to their copyrighted work. Yet, these same folks are dipping buckets into sinking ships, trying desperately to bail out the water. Where are our readers? Where is our revenue? Hell if we know, but let's blame freedom of distribution. Seems like the drowning is inevitable with that approach.

Advertisers are catching on now that sites that draw more viewers get, well, more views. More views of ads leads to more prospective consumers. You would think, then, that publishers might see this as the perfect chance to bail all the water out at once. Allow freedom of content and track audiences better. With more views, scale the advertising costs up penny by precious penny.

Freedom of distribution isn't the enemy here, as Malcolm alludes to -- naivety and the blame-game are. Unfortunately, the closed-minded nature of old school publishers will likely sink some excellent ships before the storm passes.

I'm NOT paying you to post the story

Malcolm makes some interesting points that ideas are making money vs. stuff. The only challenge I had in trying to see the bigger picture of profiting from the Internet was how does the little guy do it? All of the companies mentioned are multi-billion dollar companies with hundreds if not thousands of employees to make this all possible. I realize they all started at one point with an idea and probably one or two people, but it’s hard to see how the majority of sites could go from free to for profit with consumers going along happily for the ride.

The Bloomberg articles makes a very confusing argument for paid content on the web. Why on earth should you pay a newspaper for reposting their article when their article is free to begin with? On top of that if you post something from that site it could either draw more traffic to the news site through a link or make someone want to go directly to the site after reading the article to learn more. I think it’s a silly idea that will never take off. Plus who is going to be the watch dog over this to make sure all the zillion of websites out there are following the rule?

Apple has "two growth engines," great earnings

For those of us who bought APPL, we're in for an escalator ride today on earnings that beat company and Wall Street expectations...by a lot! Maybe Avery bought 10k of the wrong stock!
http://www.smartmoney.com/Investing/Stocks/Market-Update-Tuesday-Oct-20-2009-19906/

Gresham's law of knowledge

Ghosh's model of trade on the Internet was interesting. Treating knowledge as sort of a currency of Net economy is also illuminating. But I think his models or arguments are metaphors, rather than scientific propostions.

"Life on the Internet is like a perpetual auction with ideas instead of money." "Every exchange of knowledge is like the trade of economic goods." Such statements depicts the net economy well, where knowledge travels freely and accumulated knowledge yields power.

However, knowledge and economic goods or currency may have things in common but are not identical. Knowlege market is always an incomplete one. Quality of knowledge is overwhelminglyl important and differentiated. If we let mechanism of supply and demand decide the distribution of knowlege, I think in most cases, "bad knowledge will drive out the good." Some knowlege, such as public information has to be constantly supplied, I guess, regardless of the demand.

Collective responsibility for news? Really?

Washington Post legend Len Downie, with journalism scholar Michael Schudson, wrote this:
"American society must now take some collective responsibility for supporting news reporting – as society has, at much greater expense, for public education, healthcare, scientific advancement and cultural preservation, through varying combinations of philanthropy, subsidy and government policy."
http://www.guardian.co.uk/commentisfree/cifamerica/2009/oct/19/newspapers-media-journalism-future-local

Seriously? Government policies and subsidies? Why not government subsidies...just take my tax dollars to save the Post. He has some good ideas, including models like our new UT Web initiative, but I don't agree that "journalism, philanthropy, higher education, government and the rest of society" have a responsibility to ensure the future of journalism - at least not in its current form.

Pricelessness, complementary goods, and surplus

Rishab Ghosh makes a point that is vital to understanding how Internet information is different; it’s instantly interactive. Like he says, we aren’t online “just to read books, but to participate in discussions, to meet people and share ideas.” And this was a decade before, say, Twitter. It seems obvious but intriguing that the “Daily Me” allows everyone to craft their own “most valuable” content, often at no monetary cost. So we have a resource on which much content is generated by free volunteers, accessed by unpaying customers who desire it for intrinsic, not monetary, value. I like how he describes this as “pricelessness” rather than “valueless.” But how in the world do you make money in that environment? Provide better content? Target the few people willing to pay you for your specific content? He writes about his e-mail alerts which led to a growing subscriber base and wonders whether people might be willing to pay. But he gave it away, first. That’s one of many ironies on the Web. For example, we have fewer journalists, being paid less, but asked to create multimedia content so they’re working harder while being seen less. Then Ghosh hits the nail on the head – who should pay, the readers or the writers? Will foundation-supported news outlets like MinnPost and the St. Louis Beacon compete for readership to ensure the next round of Knight Foundation funding? Will online news outlets become like radio stations, giving away cash during “ratings” to increase audience?

Chris Anderson’s article about Free is fascinating. I wonder how many companies earn entire livings as complementary goods (like shaving cream)? It occurs to me that the opposite of this used to be payola. A record company or artist would pay a radio station to air a song so they could sell more and make their “investment” back. That was the carrot version – now the Recording Industry Association of America uses a stick – they’ll sue you for grabbing free content. Online I think this gets much more difficult than with shaving cream. For example, shaving cream runs out but you can always find another P2P download site; food spoils but a song digitized in 1995 sounds just as good now. And complementary goods are everywhere. There are multiple free browsers, open-source shareware to compete with licensed software, and perhaps thousands of sources for the same news story (you can’t avoid balloon boy). Is news a complementary good? Or is this the future of news: “anything that touches digital networks quickly feels the effect of falling costs”? Buried on page 6, Anderson writes about scarcity, reputation, attention, money and externalities. In an information economy, if free is what you want, free is what you get. Just hope your paycheck doesn’t depend on being paid for digital content.

Malcolm Gladwell shares a great quote from Stewart Brand – “information wants to be free.” Then a couple of sentences later he uses the word “bloodbath.” I feel like I’m reading about Armageddon – years of strife followed by the dawning of “a new role for professional journalists.” I’m starting to wonder what Anderson means by professional. However, the insight on the popularity of free Hershey’s kisses was fascinating. That’s why some newspapers argue that they have more readers than ever before, online – free is attractive. So how do journalism outlets get in on the “huge amounts of money ‘around’ the thing being given away” when they’re the thing being given away? Sure it’s good for Amazon or Google, but what’s the content worth. I think I just got nudged, for the first time, in the direction of the publishers who want to charge the aggregators for content.

"Free" magic

"Free” is a very attractive term to consumers. When I heard the news from my friends that they got some fancy software from an online site, my first question was always, “Is that free?”
I am very much enjoying products such as music, movies and other kinds of software which can be easily downloaded online. If I had to spend my money on music and movies, I would probably quit such hobbies or try to find other sources which guarantee free usage. Strangely, I do not feel guilty when I get goods online as compared to offline. When I have gotten anything for free offline, such as when I got beer for free or complimentary books, I always feel lucky. However, when I get goods online for free, I do not feel lucky; rather, I think that those goods should be free. As the articles said, there are differences in the consumers’ mind-set between offline and online markets. Offline, we tend to think that the products are scarce, so paying for the products is acceptable for getting them, while we are likely to think the online products are abundant and unlimited, and thus we do not need to pay because we can get them anytime. It is interesting that the more expensive the products, the more consumers are willing to buy them in the offline market, but their behavior in the online market is the opposite.

Model in the freeconomics?

Dual Model in the freeconomics market?

In the debate of charging news content on news aggregate sites and the points made by Ghosh and Anderson, it seems a dual model emerges and could lessen the pains of current news industry: first, to negotiate the ads revenues with Google, Amazon, etc. and second, to generate the values of the news product.

The questions to the first include,

1. how to calculate the amount of advertising revenues of newspapers’ online content or online traffic which is moved or grabbed by Google or other news aggregate website?

2. Since DMN paid so much cost in generating content (how much in generating only the content and how much for other investment?), how much is reasonable for Google to pay? If Google doesn't aggregate the news, will DMN’s online website attract enough attention?

3. Similar case, is 30/70 a fair deal and a good model? (DMN and Amazon)

(4. Why the case focuses on DMN?)

The ideas to the second one includes Anderson's and Ghosh's non-monetary rewards, and it seems the human resources concept is used in Anderson's GeekDad case: how to find the best person to write and how to manage the covered issues.

As the famous bloggers in Taiwan, many are good at transforming the nonmonetary resources (reputation, attention, reproduce the content) to monetary rewards. They might not earn money from blogging directly at the beginning but are beneficial from it in a different format. However, not everyone is good at or fit for this strategy, especially to big news organization, which can use its content in different way but need to consider the objectivity idea and the welfare of the employees. In addition, under the growing nonmonetary reward system, is the labor issue easily ignored?

I think Anderson's article itself exemplifies how to make the best use of the content, the product, by promoting his website and the new book naturally within the articles.

Who wants to pay when it can be free?

I think Chris Anderson’s notion that “free” is a market strategy within itself is an interesting point. I think many of us look at free as just free. You don’t have to pay. But looking closer it is a marketing strategy that has come to be expected on the Internet. For example in class on Thursday when I mentioned the aggregator for RSS feeds called www.shrook.com I mentioned how it was free but only for 30 days. I saw a couple of faces look down and go “oh”. They did that because they know if this one site is going to charge chances are they can find another site that does the same thing that is free. So that leaves the question of why should a site charge for its services when another could offer a similar product for free?

Of course every site is going to claim they can offer something the other site can’t. But how many sites out there are really offering something others can’t? I say there’s only a handful. I find it interesting that this conversation has been going on since the late 1990’s, especially before the tech bust. I would have thought everyone would want to charge back then since it was new and no one using the Internet knew better.

That fact that the debate of free vs. fee is still going on shows that no one has found a business model that works. I just did a search on YouTube for “How to make money on the Internet” and I came back with 36,800 videos. Some people explained how they made their millions (sure!), some were promoting making YouTube videos for money, and others really didn’t have any helpful advice. I don’t think there is any question that free is always going to beat paying a fee.