The future of news cannot be built on a broken view of the past
Google's VP of news, Richard Gingras, argues that our understanding of today's publishing industry is built upon a fundamental misreading of the past.
At the mid-point of the ACCC’s 18-month inquiry into the impact of technology on Australian media, it’s time to acknowledge that a profitable future for the news industry is attainable if we acknowledge and move beyond the challenges of the past and work together to adapt to the reality of a digital future.
There is cause to be optimistic about the future of news publishing in Australia, but not on the basis that success will be achieved by preserving old business models – it will depend on publishers embracing technology to reach audiences in different ways, and rethink their commercial strategy.
These are critical considerations as Australia’s competition regulator examines the transformative impact of digital platforms on the news and advertising industry and considers what action, if any, should be taken.
But by taking – as some of Google’s detractors choose to do – an overly simplistic and homogenised view of technology, we risk encouraging an overly simplistic policy response.
Technology platforms, and the services they provide, are dramatically different. Twitter, YouTube, Apple, Google, Facebook and Amazon are not the same. They have different business models, different use cases and different motivations for their behaviour.
A simplistic narrative of news organisations being suddenly poleaxed by technology, with “digital platforms” cast as the villains, is both incorrect and helps no-one – least of all today’s media companies.
Before the World Wide Web arrived, a newspaper was your local internet. It’s where we came together to find out information, discuss events, trade goods, meet people. That was how it worked for most of the last century.
But people’s habits have changed markedly since then, deeply impacting the way journalism is funded, and it’s important to understand how and why that happened.
For the first decade or so of the life of the internet, from the mid-90s through the mid-00s, many publishing executives viewed it first as a novelty and then later as a handy, low-cost additional means of reaching audiences. The revenue streams they generated from their print classified and display advertising seemed impregnable, and there was no obvious cause for concern. For too many years – perhaps two decades, in some cases – this was their approach.
This was a devastating lack of assumption about the impending wave of change the mobile internet would create.
That is not a criticism – I understand the mindset of the times, because I was there. I was among the new breed of publishers that were digital-only, having co-founded Salon.com, the first digital-only magazine.
To put oneself in the shoes of a newspaper executive in 1998, when their classified ad revenues resembled rivers of gold, it’s easy to imagine how news and the business model supporting it could be seen as inextricably linked.
In fact, the old funding model for journalism deteriorated because the revenue flow wasn’t based on news, it was largely based on those marketplaces and on display advertising around softer “lifestyle” content. The value proposition of the Adelaide Advertiser wasn’t: “We have the best local crime and council coverage”. It was: “Here’s everything you need to live a good life.”
The internet, by putting a printing press in everyone’s hands, created a vast new marketplace of diverse services and expression that detoured around incumbent publishers.
Classified ads, which contributed perhaps a third to a half of the revenue of many newspapers, migrated online and splintered into hubs for cars, real estate and jobs, some of which today remain under the stewardship of the publishers. Trading of goods is not even considered advertising any more – it’s now the domain of online marketplaces.
This is why it is incorrect to say that technology platforms destroyed the news industry. The disruption was driven by changing consumer behaviours. Without that understanding of the past it would be impossible to find a way towards a profitable future.
So where indeed do we go from here? There are reasons to be optimistic about the future of news in a digital world, but the solution is not simple, and there is no one path to success, because not all audiences are the same nor any two publishers exactly alike.
Today, news publishers must reframe their value proposition around, well, news. If you’re asking people to pay for content, which many publishers are now doing, it raises the question: what’s the value proposition? Why should a consumer be paying for this? They have to have news that is valuable, which consumers can’t get elsewhere.
Google puts the user first in everything that we do – and we acknowledge that this hasn’t always been helpful to publishers, particularly those with paywalls. But we have listened to the industry and made changes to get the balance right, in the interests of both users and publishers.
Today, Google is helping publishers in a number of ways, whether by supporting innovation in their newsrooms, providing advertising exchanges, working to create signals that differentiate premium content from misinformation, or helping casual readers become paying customers.
Google and publishers share a common cause – we both value and depend on free expression and universal access to knowledge
This is why, as Australia weighs the changes that have swept through the news industry over the past two decades and considers whether new rules are needed, it is important to understand that you cannot take a homogenised view of the many digital platforms used by people around the world to discover, communicate and trade. To do so would be to misunderstand the dramatic changes in the marketplace and consumer behaviour, and to risk a crippling response that stifles innovation and creativity.
We cannot and should not set back the clock to a bygone age.
Richard Gingras is Google’s VP of news.
Don’t you love the way hucksters assert they are here to “help”?
Google relies, by its nature, on sucking value out of news businesses. That’s its business model.
The future of news will be a model like Netflix. Do we think Netflix is likely soon to open its doors to Google/YouTube? About when hell freezes over.
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Domain. Realestate.com.au. Carsguide. Seek… the list goes on and on of digital disruptors that over the past 20 years have stolen all those eye-balls and dollars from Fairfax and News and other newspaper publishers. Oh, that doesn’t fit the narrative does it? Because many of those were established and are still owned by those very publisher groups. The one who should be yelling loudest at Google is the Yellow Pages – how dare you provide a better service without the need for bloody big books of ads.
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“Google puts the user first in everything that we do”
So – when a user say’s they do not want to be tracked… but Google tracks them anyway… Google are doing that for the users benefit?
Lets be really clear and simple – Google puts Google and shareholder value First and everything else is SO far down the list its insignificant
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“Today, news publishers must reframe their value proposition around, well, news. If you’re asking people to pay for content, which many publishers are now doing, it raises the question: what’s the value proposition? Why should a consumer be paying for this? They have to have news that is valuable, which consumers can’t get elsewhere.”
This is correct, and also points out to why the future looks so bleak at the moment. Instead of going the way that *might* work by producing something of value (properly researched and edited content which puts the interest of the audience first), publisher’s are going a direction we are *confident* ends in business failure (unethically produced click-bait/content which puts the interest of owner’s first).
Its very, very hard to feel sympathy for an industry so committed to self-destruction. Why not try the subscription/user first model? Too hard basket?
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You’re right. In fact the comment above reflects the problem. People assume news media failed because of online classified. It didn’t.
The core problem is that news media had no focus on readers and value. They still dont in most cases.
Murdoch uses media to bully people and get what he wants. Others have done that before.
Fairfax is run by people who see no value in news. They’ve never really even tried to operate commercially.
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The ultimate issue is that the average consumer is not that interested in news, and definitely does not want to pay for it.
I don’t see news surviving beyond free national services such as the BBC and ABC, and politically funded propagandist services such as Fox.
The main problem is that due to the connection of the right wing/big business/money, this means we won’t ever have a balanced situation. We will have “neutral news” and we will have “right wing” news. We’re accelerating towards that reality now.
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Hi Richard
You know those evil guys who lobby for gun ownership. Or who work for the sugar industry to ensure we all keep consuming lots of sugars? Or fossil fuels.
Those guys have an amazing way of distorting what they do so they can see their services as good for the world.
Amazing how self- deluded some people can be.
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Googles mission is to organise the worlds information and make it freely available to the masses.
Many people in the world have woken up and are far more awake than in any other era. FB too have aided this, with their ability to share this information.
There have been coughs and splutters, however it will be interesting what the world look like in 20 years. Without Google and FB we would still be eating out of Murdoch’s bowl. He still wields power, however, fortunately, it is fading.
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