Dispatches from the living amongst journalism's walking dead

The myth of the “free ride”

David Marburger took his show on the road this week with a much-emailed guest editorial in the LA Times titled “The free ride that’s killing the news business” (again with the hostile wording). Of course, I got this emailed to be from no less than 20 fellow journalists, all of whom seemed to not understand the online news business at large. He’s preaching to the choir of the same “stay the course” news people who got us here in the first place – and they love it.

Marburger tells and retells the story of the Little Red Hen in all of his appearances. Have you read it yet?

Remember the Little Red Hen? She’s the one in the folk tale who asks the other barnyard animals if they will help her cut the wheat, grind it into flour and bake the bread. They refuse. But when the warm bread emerges from the oven, they are eager to help the hen eat it.

Now let’s suppose the story continues, with the Little Red Hen opening a roadside stand to sell her bread. Instead of merely eating it themselves, the cow, the pig and the dog each take some of her loaves and open competing roadside stands. Vying for sales, they undercut her price and each others’. Because the Little Red Hen bore all the costs to produce the bread, and the other animals bore none, she can’t afford to match their prices, and they drive her out of business.

Newspaper sites are supposed to be the hen. He likens aggregator sites like Newser.com to the other animals.

To anyone that isn’t in the news business, this sounds pretty acceptable. After all, isn’t the point of competition in a free market supposed to mean that you try to undersell your competition by having a lower overhead? It’s called good business. Too bad for the Little Red Hen – maybe she should become a manufacturer or wholesaler instead of a shop owner.

To whose that aren’t familiar, Newser.com is a worldwide wholesaler of other people’s news, in a sense. They summarize stories from many news sources in a paragraph or so and link back to the original story. As you can see here, they state on each summary where the source is and link to it. Sure, it could stand to be more prominent, but it’s better than what TV does every day. (It should also be pointed out that site looks dreadful and isn’t very user-friendly)

Marburger claims that sites like Newser are “free riding” on newspapers and it should be illegal. From the poll on the editorial, which asks “Should websites be allowed to use excerpts from daily news sites?” the populace doesn’t agree (it’s 68% against the Marburger plan, 32% for it as I write).

The basis for the Marburger argument is that sites like Newser are driving down online advertising rates because they aggregate content and surround it with low-priced ads. He calls them “competitors”. He says they are “direct substitutes for newspapers”.

First of all, if your story can be summarized in a paragraph and that’s honestly enough for a casual reader to know about it – it probably isn’t worth fighting about. Secondly, Newser isn’t a competitor with the newspaper websites it links to. A quick look at Alexa shows how their traffic compares to the likes of the two Times, Tribune and Guardian:

Newser ranks way, way below the big news sites in terms of the golden stat of pageviews.

Newser ranks way, way below the big news sites in terms of page views.

While I agree that advertising is the issue – it isn’t the fault of aggregators. It’s that the entire business model for online advertising is broken. As Bill Grueskin said last month in an excellent paidContent analysis, “Aggregators are more a distraction from the real crisis than the cause of it” because even if they are siphoning off users (of course, they also refer users), it isn’t really hurting the bottom line.

Online ad rates have been artificially low for years. We’re partly to blame – after all, most newspaper have been online since the 90s and we never charged for online ads what they are worth. Furthermore, the online audience doesn’t like and doesn’t see value in online ads. They block them, they don’t click on them, they HATE them.

CPMs are so low that thousands upon thousands of views to our site today won’t even buy lunch for our newsroom, let alone sustain the industry. Grueskin says what a lot of us in online news have been whispering for years – why are we measuring our worth in page views anyway? We should be using metrics like page views per user or time on site rather than by theĀ  number of people visiting the site, “many of whom may not assign any value to the journalists who generated the content”.

In other words, better understand the audience, seek out what it wants, determine what we can provide – possibly in terms of a premium service – and find a way to monetize that outside of online ads. That’s something an operation like Newser could never do and it actually provides a sustainable plan for future growth. Crazy, I know.

So why do we have to keep giving face time to David Marburger and his ilk of “stay the course” followers who want to legislate their way out of an adaptation of the business model. Let’s get to the task at hand…

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2 Comments

  1. Anonymous

    Well, speaking of a dreadful user interface – have you looked at this blog yet?

    • Ha! But seriously – it’s a blog. It’s WordPress UI. All I do is play around with the php and styles as a way to learn more about the process. Forgive me if I don’t feel too broken up about you not liking it, anonymous person #1.

      Methinks you just wanted to get a slam in, which is fine. Otherwise, feel free to go into detail.

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